There are many ways that you can grow your business. You could hire more employees, raise more money, or invest in new equipment. But the most important thing for your company is to make sure that you're making money.
The value of the property security is not a factor in determining the maximum debtor finance limits in this case. This means getting paid on time and being able to pay all of your bills in a timely manner as well. If you're having trouble with payments from customers who don't have enough cash to pay upfront, then check out this post about debtor financing!
- Quick Access To Working Capital
You might think of debtor finance as a loan, but it's not. It's an asset-backed financing method that provides working capital to your business in exchange for your customers' accounts receivable. This means that you don't have to wait months or years to receive payment on invoices—and you won't be stuck with the overhead costs associated with processing and collecting those payments on your own.
No Fixed Assets As Collateral
It's a great benefit for small businesses that are just starting out or growing. With no fixed assets as collateral, you don't need to worry about the value of your business property going down in case of a financial setback.
This is also beneficial because it helps many businesses get off the ground and achieve their dreams. Business owners who couldn't afford the cost of securing an asset can now enjoy the benefits that come with owning one—without having to take out loans from banks or other lenders in order to be able to do so.
Available To Smaller, Less Established Businesses
Another great thing about debtor finance is that it's available to smaller, less established businesses. This means that if your business has been trading for less than 2 years, or even if you don't have any assets, then you could still get the funding you need. This is a huge benefit because many other kinds of financing are often only open to larger companies with plenty of cash flow and assets.
Better Credit Control And Processes
There is no doubt that a debtor finance company can help you improve your credit control, cash flow and risk management. When you know that there is money available if needed, it allows you to plan better and make more accurate decisions. Having access to a working capital line also gives your clients the confidence they need when placing orders with your business. This, in turn, increases sales and profits for the whole operation.
When Interactions With Customers Become Awkward.
It goes without saying that following up on delinquent invoices can damage your business's relationship with its clients. The additional financial strain may cause unpleasant and uncomfortable interactions between all partners, which may permanently harm the relationship.
You can outsource the invoice collection process with a certain kind of debtor finance, freeing up resources so that you and your staff can concentrate on other areas of your company. This is a component of invoice factoring, and the invoice collections are handled by knowledgeable experts, preserving connections and making debtors more receptive when a third party is involved.
There are many benefits to working with a debt financing company, but they can also be risky. The key is knowing how these companies work and making sure that your business has the right preparation in place before signing on with one. If you're ready to start looking into options for your own business, contact us today!