Can Factoring Save Your Business?
Posted on September 18, 2014 in Factoring
Business owners work countless hours to make their dreams come true. But every dream has its ups and down, which can break the spirit of anyone. For the entrepreneurs who stay with it and get their companies past the initial start-up phase, it is supposed to be clear sailing from there. Once your company becomes self-sufficient in terms of generating enough revenue to pay the bills, then the rest of your time can be spent planning corporate growth and preparing to meet all of those goals you set in your business plan. But, in the business world, things do not always go as planned and that is why nearly 33 percent of all UK businesses fail before they get a chance to really see success.
There are many reasons why a business fails and has to close its doors. Unfortunately, bad management tends to be one of the more prevailing causes of business failures in the UK and around the world. Another big problem for UK businesses, especially start-ups, is lack of necessary cash flow to keep the business afloat. Most entrepreneurs have business plans that allow for the first six months of the business to be paid for by start-up funding. After that six month period, the company should be able to sustain itself. When things do not work out that way, then the business owner finds himself facing a very difficult decision.
1st Commercial Credit Can Save Your Start-Up From Failure
Why do nearly 1/3 of all start-ups in the UK fail in the first year? One big reason is past due invoices. After the start-up funding has dried up, the business owner then turns to his cash flow to pay the bills. For a start-up, there is nothing more damaging than past due invoices. The business owner can look at his sales ledger and see that his invoiced sales are brisk, but the aging report shows that many clients are paying their invoices anywhere from 30 to 90 days late. For a start-up that has run out of its initial funding, past due invoices represent a significant challenge. Because the start-up has almost no credit, it is impossible to get funding from a bank. Unless an alternative is found, the company will close.
1st Commercial Credit is a factor that can help your start-up to develop a sustainable cash flow and meet all financial needs. The proactive entrepreneur will establish a relationship with 1st Commercial Credit the moment he opens his business so that he will create a solid financial foundation for his company right away. We will create a custom invoice discounting programme for your start-up that will turn your invoiced sales into cash on or before the invoice due dates. By the time your six month anniversary comes around, you will already have a strong cash position and be completely self-sufficient.
Established Businesses Can Fail Over Time As Well
It is easy to discuss why start-ups fail because those conditions seem so obvious. But did you know that success can close down an established business just as fast as a lack of credit will close a start-up? When a company starts to see a gradual increase in sales, it is able to adjust its operations to accommodate that increase. But when a product or service offering really catches on and the sales spike quickly, then that becomes a challenge for any business owner. A sharp spike in sales means that a company has to invest in more resources to meet client demand. Hiring new personnel takes time and bringing in more materials can take time as well. In the meantime, the company has to find a way to finance all of this growth.
When a company takes on bank funding to try and finance its growth spike, it may wind up regretting that decision in the long run. Bank funding has recurring finance and interest charges that expand the debt on a regular basis. Over time, the complete cost of the debt may wind up being more than the original balance borrowed. With invoice financing through 1st Commercial Credit, the company can use its new revenue to finance everything it needs to meet customer demand. When you use factoring to create a reliable cash flow, then you will always have cash on hand to meet payroll and increase your purchasing obligations. As your invoiced sales increase, a factor will be able to raise your available cash by advance you money based on the face values of your invoices.
Factoring Can Save Your Business And Help Your Business To Grow
A company that factors invoices is a reliable business partner that offers finance options banks cannot offer. When you do business with an invoice funding organisation, you are utilising funds that your company has already generated to pay for ongoing operations. 1st Commercial Credit can set up your account in five business days or less from the day you submit your completed application. Once you have an account approved, it only takes 24 hours to approve an invoice and deposit the cash into your account. 1st Commercial Credit can turn that pile of past due invoices that threatens to close your business down into a steady stream of funds that will save your business.
The best part about utilising a factoring account from 1st Commercial Credit is that you can make it part of the way you do business and never worry about cash flow again. The smart entrepreneurs know that a one-time financial fix only means that the problem will arise again and cause the same challenges. When you keep your factoring solution in place at all times, then the funding problems you experienced will not return and your company can look forward to the future. Instead of worrying over how you will meet payroll and keep the company doors open, you can shift your thinking into a mode that looks towards a bright future. You can start to plan your company’s expansion and revisit all of those goals you set down in your business plan when you started.
Use Invoice Discounting To Prevent The Threat Of Business Closure
As long as your invoiced sales are brisk and your business plan is solid, then your company should not have to worry about the possibility of closing its doors for good. With a factoring plan through 1st Commercial Credit on your side, your company will have the cash it needs on hand to pay vendor bills and meet payroll obligations. You can create financial stability in your organisation and give yourself a chance to grow in ways that you may have never thought possible in the past. Invoice funding turns a bleak financial outlook into a promising economic future.
Contact 1st Commercial Credit right now and get the process started immediately. There is still time to prevent you from having to close your company and watch your dreams crumble. 1st Commercial Credit has the resources and financial experts necessary to put together a custom discounting plan that will save your business right now and set you up for long-term future success. There are always alternatives to closing your company’s doors. Instead of turning to a bank for help at a time when a bank is powerless to do anything, you need to contact a quality factor such as 1st Commercial Credit and put your company back on the right path.