Joe and Mary Smith started a company two years ago to manufacture children’s baseball equipment. The business has grown rapidly from its inception. Mainly due to problems with cash flow, the business could not expand. After a friend of Joe’s told him about how accounts receivable financing had worked for her small business, the siblings decided to give it a try.

They decided to start by turning just one invoice over to a finance company. After going through the company’s application process and setting up an account, they turned over an invoice for $100,000. Within 24 hours, the finance company transferred funds in the amount of 80%, or $80,000, to their business account.

About a month later, the customer paid the finance company the $100,000. The finance company then kept its agreed-upon fee and turned over the rest of the funds to the Smith Family Manufacturing Company.

By receiving the initial amount of $80,000 in their account at least a month before they ever expected to receive the money, the Smiths were able to purchase more supplies to fill a large rush order that had just come in from a new client. Without those funds, the Smiths would have had to turn down the customer, losing what turned out to be one of their biggest customers. By using accounts receivable financing, the Smiths were able to keep their business moving and growing.

As you can see, the ability to get an immediate return from an invoice can do a number of things. Those funds can be used to purchase new inventory, make improvements to existing equipment or buy new equipment, meet payroll, pay bills, and more. In short, accounts receivable financing provides your company with the flexibility it needs to keep growing and succeed.