Working capital is difference between a company’s current assets and current liabilities. More simply put, it’s the actual money you have on hand to meet your current and short-term obligations. If you don’t have any available working capital, you’re going to have problems fairly quickly and may even cease to trade. You would not be alone. In a recent U.S Bank survey, 82% of businesses that failed, cited a lack of cash flow as a main reason why they could not continue. A position nobody want to be in.
Invoice factoring gives a business immediate access to cash to use for whatever is needed without creating debt. By using the open accounts receivable to form the basis of what can be advanced, a factoring company can approve far more companies for a facility than traditional bank who have strict qualification criteria. It provides continual funding. The more sales you make, the more invoices you issue, the more money you can get. Your funding line grows with you ensuring you have the working capital you always need. Best of all, there are no loan repayments to make as the factoring company gets paid back by your customer and you don’t have to spend time chasing for payment.
Working capital is vital for a company’s survival. If you don’t have any, it’s going to be stressful juggling your payment obligations. An invoice factoring company like Eagle Business Credit helps bring predictability to your cash flow, as well as providing free back-office support. Qualifying for one of our funding programs is easy too, even if you haven’t been in business very long or are loss making.