Waiting for Invoices to be Paid? Cash Flow Funding is the Solution!
Written by moxysupport on August 14, 2015
See if this sounds familiar: Your business is humming along nicely. While it may have taken a while to get where you are, and at times it was a struggle, you are finally able to say that you are running a profitable business. But one day you look at your finances and realize that, although you have a lot of customers with orders constantly coming in, your cash accounts have gone dry. How could this be possible? Perhaps you took a look at your books a few more times. Maybe you called in an accountant friend to take a glance at them. Still the same result. The basic problem is that you are doing too well.
That seems silly when you think about it, right? How could a business be too successful? Well, here is how that works: You have a product that people love; they just can’t get enough of it.
Take lemonade, for example. Perhaps you had a lemonade stand when you were a kid. Your mom or dad probably helped you set it up, and then you sat on your front lawn or on the street corner trying to get people walking by to purchase some. Okay, say you are selling lemonade now. You have come up with a great new recipe and it is selling like crazy. If you are selling directly to the consumer – as you would at your lemonade stand – you would be rolling in profits. This is because you are getting immediate cash from the buyers.
However, what if a grocery store wants to buy your lemonade? Great, right? What if they want to put it in their stores all over the country? Even better! But, that grocery store company probably is not going to pay you right away. While you ship hundreds of cartons of your delicious lemonade to them, you now have to wait to get payment from them. It may seem a little unfair, but this is usually how things work.
So, while people everywhere may be buying your lemonade from those stores, you are still waiting to get a nice fat check in the mail. Meanwhile, even if your product is flying off shelves and the stores want more, suddenly you do not have the cash on hand for supplies, production costs, or the salaries of your employees. See why being too popular can be troublesome? The good news is that there is a solution: cash flow funding.
What is Cash Flow Funding?
Cash flow funding – also called factoring – is when you sell your accounts receivable to a company like US Funding in exchange for immediate cash. Those invoices you were waiting on for payment? Not your problem anymore. While you get to fill your cash accounts back up again, our cash flow funding company has to wait for the payments. Now you will have the money you need to keep your business going and growing!