The economy relies on distributors, and distributors rely on invoice financing for small businesses to get things moving to fill customer orders quickly and efficiently. Distributors serve every facet of modern commerce, from imports to medical equipment, e-commerce purchases, consumer electronics, clothing, construction materials, and more.Â
1. Keep capital on hand for purchasing inventory
Distributors need to have products to fill customer orders. However, when revenue is tied up in unpaid invoices, the capital may not be on hand to replenish their stock. Invoice factoring frees up capital by turning outstanding receivables into cash so they can take on custom orders of any size.
2. Prevent supply chain disruptions
Minor disruptions in supply chains can cause large ripples that impact businesses and customers. They can stem from anything, including needing more drivers, equipment and storage space, purchasing inventory, and more. Most times, those obstacles can be traced to distributors waiting on payments for invoices with staggered windows of 30, 60, or even 90 days. Invoice financing from New Century Financial helps to mitigate supply chain disruptions by converting unpaid receivables into cash within 24 hours. Our process accelerates cash flow, so distributors always have capital on hand for their needs.
3. Avoiding the debt cycle
When distributors experience disruptions and cash flow issues, they typically take out short-term loans. The problem with short-term loans is that they place debt on the books. The revenue is suddenly split between regular business operations and the balance owed on the loans. As more disruptions occur, they seek additional loans, which creates a debt cycle and turns cash flow into a trickle. Invoice financing heads off all of those issues by accelerating cash flow without placing any debt on the balance sheet. This allows businesses to pivot away from loans. Their daily operations and growth plans are based entirely on their finances instead of the money they owe.
NCFÂ offers the most comprehensive invoice factoring services, from fast turnaround to transparency, credit checks on customers, flexibility, and more. To get started, contact the team at New Century Financial today.