Managing Working Capital

Managing Working Capital

Financial experts agree that managing working capital and maintain cash flow is critical to a small businesses’ successes.  For young companies finding additional sources of working capital can be especially challenging.  More and more companies are finding cash flow relief by turning to alternative lending companies, like factoring.

Traditional banks have several policies that make getting a bank loan difficult.  Most require two to three years of positive financials and the owner to have a strong personal credit score.  As banks continue to get more conservative in their lending, they are no longer willing to overlook a loss that occurred during the Pandemic.

More businesses are turning to invoice factoring to solve their cash flow problems.  Factoring is the process where the business owner sells their accounts receivable to a factoring company for cash.  The business owner now has enough money to make payroll, pay taxes and buy supplies for their next job. 

Factoring offers these advantages:

  • Invoice factoring provides a steady source of working capital, limited only by the amount of business you generate.
  • Advances are based on your customers creditworthiness, not yours.
  • Invoice factoring will help your business’s credit rating.
  • Invoice factoring will finance the expansion of your business.                                                                                                                                                       

For 42 years American Receivable has helped their clients grow and thrive.  To learn how our invoice factoring services can help grow your small business, give us a call at 1-800-297-6652.

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