Receivable Financing - Benefits Part 3


The first two articles on receivable financing (ie. financing consumer receivables, factoring retail installment contracts, and  consumer notes, etc.) enumerated eight distinctive benefits which receivable financing offers.  There are numerous other benefits associated with consumer contract funding which will be addressed in part three of this series of articles.

• The client may leverage off their customers' credit.  A company seeking to finance their consumer receivables does not necessarily need to be profitable or in business for at least two years.  Likewise, if you are looking into the possibility of financing your retail installment contracts, you most likely will not be required to meet the assorted credit criteria required by banks and other traditional financing sources.  The non-traditional funding source, while not completely ignoring your creditworthiness, will focus most heavily upon the creditworthiness of your customers.

• You will be provided with detailed management reports.  If, for example, you are financing consumer notes and want to closely monitor your customers payment histories, the funding source can provide you with detailed management reports.  This will position you to better run your business and manage your cash flow.

• Concentrate on marketing and business expansion. If you decide to sell your consumer contracts to enhance your cash flow you will soon discover that your business will benefit in more than one way.  As a business owner you probably spend more than half your time searching for capital, fending off suppliers, and doing collection work, administration and bookkeeping.  By financing or selling your consumer receivables, your will  position yourself to free up your time to concentrate on sales, marketing , expanding your business and other directly profitable activities.

Want to learn more about the other benefits?

Read Part 1 of the Benefits of Receivable Financing
Read Part 2 of the Benefits of Receivable Financing