Saturday, December 12, 2009

Ron Finch - When the BANK SAYS NO, there is an alternative solution


My Mechanic said “I couldn’t fix your brakes, so......” “I made your horn louder.”
This was not the alternative solution that I was looking for. At one point or another, every business is confronted with cash flow problems, and although there is an economic downturn at this time, it doesn’t just happen during difficult times!

Businesses need cash for many reasons. A company may be experiencing sudden growth, there may be a need to expand production, there may be a need to fund a major transaction, or there may be an opportunity for big discounts on supplies or raw materials if acted upon quickly. All can create an immediate, sometimes urgent need for funding.

Current research shows that a good proportion of small and medium sized businesses fail because of difficulties in meeting short term financial obligations - not because business is bad. So it seems contradictory for a growing and profitable business to get into serious financial trouble, even go broke. But on closer examination, it’s not surprising. Even if one or two of your larger accounts fails to pay their invoices on time – even if they take an additional 30, 60 or even 90 days to pay - you’ve got a cash flow problem!

Traditionally, business people have relied on corporate lines of credit that are derived from conventional lending sources. When a cash crunch hits, the process of acquiring financing can become a lengthy, arduous and sometimes impossible experience. But today, there is a viable alternative to surviving those cash-strapped cycles.

When the BANK SAYS NO, there is an alternative solution that doesn’t involve giving up your equity or increasing your dept load. This alternative form of financing is known as Factoring and is sometimes referred to as Accounts Receivable financing. That Outstanding Invoice to your customer is cash that you are owed. The problem is that your customer wants to keep it a little longer, sometimes as much as 120 days. But until the invoice is paid, you are handcuffed.

At Liquid Capital Solutions Okanagan, we recognize that invoice as an asset. Quite simply, when a company has credit-worthy accounts receivable, it’s possible, through Factoring, to get immediate cash based on those receivables. So when the bank has to say No, Liquid Capital can usually say YES and provide the much-needed financing that a business requires. More and more, Factoring has become a realistic and workable solution, allowing businesses to prevail when cash flow uncertainties can threaten survival.

-
Ron Finch

Factoring Kelowna BC
Liquid Capital Solutions
250 469 9606
250 826 8446 (cell)
rfinch@liquidcapitalcorp.com

8 comments:

  1. That was really an excellent post. I never heard of Factoring and/or Accounts Receivable financing. Thanks for sharing these information and more power.

    Jane
    online accounts payable process

    ReplyDelete
  2. Sometimes if you didn't pay your debt on the given time, it may lead into a bankruptcy case. Good alternatives for this are debt settlement solutions and finding a good lawyer who will negotiate debt settlement issues. Most important of all, both of you should cooperate to be able to win the case.

    ReplyDelete
  3. I've used receivable financing as an alternative before. Without it, I wouldn't have been able to save my business. I already had a credit card financing, but it doesn't hurt to be safe. At least it's better than having your business close down in the end.

    ReplyDelete
  4. There are only a few instances when loan applications are rejected here in Mississippi. Cash advance loans, and all of the other loans usually have a high rate of approval. Well, if one's responsible enough to pay them when they're due, then they should go for the loans.

    My business has been picking up lately here in Mississippi. Payday loans have been a good source of backup money. Because of how the business is improving this season, we're still able to pay them back on time.

    ReplyDelete
  5. great post. i read it with my full concentration and interest. thanks for sharing.
    account receivable financing

    ReplyDelete
  6. This comment has been removed by the author.

    ReplyDelete