“Being rich is a good thing. Not just in the obvious sense of benefitting you and your family, but in the broader sense. Profits are not a zero sum game. The more you make, the more of a financial impact you can have.”
– Mark Cuban
What does that quote mean and how does it apply to receivables financing?
It’s simple; businesses need money not just to survive day-to-day but to grow and thrive. Sometimes, waiting for invoices to be paid is inconvenient or puts a crimp in business plans. Receivables financing offers business owners a way to collect the money they are due right away, instead of waiting for the customer’s payment to come through in 60 or 90 days.
Using Receivables Financing To Reinvest In The Local Economy
With cash in hand, businesses are free to reinvest it as they see fit. Some will need to use the money to buy supplies and materials. Others will use it to finance payroll or other business costs. But there are still more businesses that want to expand, hire more staff, or offer more services. Thanks to accounts receivables financing, they’ll have the cash in hand to do so. They can spend that money locally, benefiting the local economy and community. That’s the beauty of receivables financings – the money is yours. There are no restrictions on use. You can use it for whatever you need.
Here are some examples of ways that the money received from receivables financing can benefit the local community:
- Hire local workers to meet personnel demands.
- Purchase materials, supplies, and services from local businesses.
- Hire local construction professionals to expand operations.
- Donate funds, products, or services to local community groups and organizations in time to meet registration deadlines for providing support or sponsorship.
How Receivables Financing Works
Receivables financing, sometimes called Factoring, allows a business to sell its outstanding invoices to a third-party “factor” or financing company. In exchange, the business receives a cash payment for the amount of the invoices. The factor then collects on the invoices. Accounts receivables financing is not a loan, and you assume no debt.
You have already provided the product or service, you’re just waiting to get paid on it. Receivables financing companies eliminate that wait time so you can move forward with your business plans and operations.
Businesses Of Any Size Can Make An Impact With Receivables Financing
This brings us back to the quote at the beginning of this post. The more cash you have in hand, the more of a financial impact you can have, even if you’re not a Fortune 500 company. Receivables financing makes it possible for businesses who may have never even considered the idea that they could influence the local community to do just that – and make a difference doing so.
To learn more about Accounts Receivables Financing, visit our FAQ page.