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How to Afford Your New Contract

Don’t Let Cash Flow Issues Get In the Way of Opportunity

Congratulations!  You finally landed that big contract you have been pursuing, the one that will launch your company to the big time!  Before you break out the champagne have you done a quick cash flow analysis to make sure you can afford this big contract?  There will always be some up-front expenses when starting a new project.  Where business owners get caught is not planning out their new customers payment history.  The larger the contract means the larger the customer.  Big companies are notorious for slow paying their invoices.  Even if the new client pays your invoices in 45 days you might have had to make payroll 6 times before ever getting paid!  That’s where some many small, medium size enterprises have grown themselves right out of business.

Banks Might Not Be the Best Source of Funding

Banks are most comfortable lending on real estate and to established companies that are not experiencing rapid growth.  Looking for alternative lenders invoice factoring is still the safest bet for cash flowing your new contract.  The Accounts Receivable Factoring company is going to focus on the credit strength of your customer to determine how much they will advance you.  Then as you invoice your customer the factoring company will advance between 85% to 95% of the invoice amount.  This gives the entrepreneur more than enough cash to cover payroll and other costs of fulfilling their contract.

Since 1979 American Receivable Corporation has been a valuable partner to its clients.  We have provided the working capital needed to fulfill the big contract and the expertise to help a business run at its peak efficiency.  We are managed by the original owners so we understand the importance of landing the new big contract and not having to pass up an opportunity.