Receivables drive business growth. Sales translate to invoices, and the payments received allow businesses to acquire new equipment, move into larger facilities, perform buyouts and mergers, and roll out new products and services. However, waiting on customer payments can usually delay the timelines for growth. In order to keep projects on track, businesses spanning all industries use invoice financing in its various forms.
Invoice Financing For Cash Flow
At its most basic, businesses use invoice financing in the form of factoring. Factoring is the simple exchange of unpaid customer invoices for capital. Factoring is not a form of debt financing. Businesses do not gain liabilities, and their credit ratings are preserved. Invoice financing through factoring is the most efficient way to maintain a steady cash flow and get money for unsettled and even delinquent accounts.
Purchase Order Financing
Purchase order financing helps growth-focused businesses increase their bottom line and get a stronger foothold in their respective industries. This form of invoice financing is designed for large and unexpected customer orders. Purchase order financing is an advance on future receivables to cover the cost of production and delivery. Once the order is filled and delivered, the customer pays the invoice, the financing is deducted, and the difference is delivered as growth capital. Purchase order financing is ideal for taking on larger client accounts where the revenue after financing is greater than the revenue generated from regular sales.
When companies take on large contract projects, cash flow becomes a big issue. Maintaining strong levels of working capital for research, deployment, subcontractors, equipment, and more, throughout the life cycle of the contract, can be a delicate balancing act. Add to this the staggered payment schedule, and a business can feel a major strain on finances. By sing invoice financing throughout the duration of a contract, businesses can maintain a healthy cash flow to handle any necessary expenses, while accumulating the growth capital necessary to take operations to the next stage of development after the contract is completed. Contracts are one of the larger areas where invoice financing is crucial.
The Most Comprehensive Invoice Financing Programs
At Vortex Funding, we offer invoice financing for businesses of all sizes, and in all fields. Whether you are taking on a large contract, are positioning your business for growth, or simply want to clear out a backlog of unpaid invoices, we can help. Contact our offices today to get started.