Financing Accounts Receivables in Canada: Important Advantages
By: Accutrac | Posted: 23rd February 2011
Over the years, Canadian companies have faces challenges in finding sufficient working capital to fund their growth. This has led Canadian companies to find more creative ways to provide the financing accounts receivables. One of the biggest hindrances faced by small businesses was regarding the lack of cash flow. As a result, most companies are reluctant to quote or accept future growth opportunities. The concept of financing accounts receivables in Canada has provided SMEs with the luxury of so called “alternative financing options”. Here is a list of some important advantages of entering a contract with a factoring company.
Balanced Payment Cycle: Every company has a set of late paying customers. This often results in slowing down the overall payment cycle of your company. Financing your accounts receivables, also known as factoring will ensure that you get a healthy percentage of your money instantly. Accounts receivable financing with a factoring company is a quick and easy process. Accounts receivable financing is not considered to be a loan, so there is much less qualification work involved to establish a relationship with a factoring company. Also, the approval process generally, take a few days instead of a months when compared to traditional financing. One of the challenges that many small businesses face when trying to grow is that many of the larger customers that they are looking to partner with are slow payers. For example, many larger retailers have a standard payment policy of 90-120 days. If it requires a substantial amount of capital to fulfill their product orders, your small business could face a cash crunch simply by accepting a great new, large retail customer. Accounts receivable factoring allows you to sell this invoice for a discount in order to capture the capital that you had to spend in order to fulfill the order.
Debts Outsourced: Once you are contracted with a factoring company, you outsource your accounts receivable collections. This gives you the right capital to work with for your next assignments and also passes off the collection process to a professional factoring agency.
I hope these inputs help you understand key advantages of working with a financing accounts receivables company.
Accutrac Capital Solutions is a leading factoring company in Canada providing services across sectors. For more details log onto: http://www.accutraccapital.com/.
Accutrac Capital Solutions is a Factoring Services provide factoring services for trucking industry. Our various services includes Factoring, small business factoring, freight financing solutions, account receivables financing etc. This article is free for republishing
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Tags: small businesses, few days, challenges, faces, invoice, cash flow, debts, accounts receivables, working capital, financing options, growth opportunities, factoring company, hindrances, cash crunch