Funding setbacks are certainly stressful for enterprises. Thankfully, banks and other financing institutions offer an array of solutions so businesses can outwork these blocks to achieving a smooth cash flow. These financing solutions can ensure continuity of operations, and can even boost the organization's productivity and profitability.
One of the funding solutions that leading corporate banks offer is receivables finance. Here are the three different ways this financial solution can solve cash flow or funding problems for businesses.
1. This solution allows businesses to get hold of cash without incurring debt. With receivables finance, a business sells its invoice and the bank pays for it. The invoice reflects the business’s money that’s still locked up and the bank will have access to that money (I.e., when the business’s clients finally pay up).
2. Businesses get hold of the money when they need it. Typically, banks release the cash within 24 hours, ensuring no time and opportunities are is wasted while waiting for the funding necessary for the initial investment. With its efficiency and reliability, receivables finance services definitely beats other financing solutions.
3. Businesses don’t need to explain to the bank the reasons why they need the money (unlike with other financing options) because essentially, they’re using their own money when they sell those invoices to cover the cash provided by the bank.
It’s crucial to note that with receivables finance, banks look at your clients because they are the ones who’ll be paying for your business. There may be an issue if the clients that you need to collect from are the delinquent kind or have a history of not paying on time or not paying anything at all.
There’s no doubt that receivables finance is a smart option that will address your funding problems. For best results, do look at other provisions and talk to a bank representative to discover other more suitable arrangements for you based on the business’s actual financial status and overall position.
Source: Business HSBC has always been included in the top 5 financial firms that offer highly exceptional financing solutions to various businesses these days.