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8 Reasons to Sell Accounts Receivable

1) Get cash quickly and conveniently

The factoring company pay upfront for the accounts receivable purchased. This results in immediate cash flow. Bank loans typically take 1-2 months while invoice factoring deals can be funded within 3-5 days.

2) Your business will not incur debt

One of the biggest monetary worries of Americans is falling into serious debt. Many of these are small business owners or entrepreneurs. With invoice factoring, your business will not incur debt that must be repaid as is the case with a bank loan. Selling your accounts receivable means debt figures don’t stare back at you from the balance sheet, even if you are cash crunched.

3) Allows your business to grow faster

One of the main reasons for small business failure is insufficient capital. It is important for a business to have sufficient funds to satisfy upcoming operational expenses. Selling accounts receivable will not tie up your working capital. You grab all opportunities coming your way!

4) Time saved chasing late payments

Don’t chase unpaid invoices. Save valuable time. Collecting receivables is time-consuming. You need to send email reminders and make tons of phone call to collect money due to you. But selling receivables to a third-party eliminates the need for in-house debt collection.

The time saved can be better invested elsewhere!

5) Saves Money

Businesses are required to place a person in charge of accounts receivable. When you sell your invoices to an invoice factoring company, you don’t need a dedicated in- house personnel to manage the accounts receivable. This job is done by the factoring company. This reduces your overhead!

6) Pay Bills on Time

With adequate cash reserves, you can pay all your vendors and creditors on time. Your market reputation goes up.

7) Bad Debt Protection

The impact of bad debts on your bottom line can be massive. Selling your accounts receivable will save you from the risk of customers not paying their debt. Factoring company inherits the risk, once accounts receivable are purchased by them. It’s not your headache anymore!

8) Maintain Customer Relationships

Once collection is outsourced, you can maintain strong relationships with your customers. Happy customers are profitable customers.