Corporate Finance – Methods to Finance Corporate Growth

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It can be very difficult for small and mid-sized businesses to compete with their large corporate counterparts because they lack the necessary access to working capital. It takes money to grow your company and size should not limit or dictate how that happens. Now, there is an innovative and flexible solution to  finance  corporate growth by selling account receivables.

When it comes to business  finance , corporate conglomerates have the advantage of large coffers as well as better influence for obtaining needed credit Historically, SMBs have been limited in their options to access affordable money, but all hope is not lost as innovative alternative solutions have emerged.

Small to mid-sized businesses can level the playing field through invoice  financing . By posting outstanding invoices on the online auction marketplace, owners get access to cash quicker than the typical 30-90 day invoice due date. In fact, it is possible to receive competitively-priced money in as little as 24 hours.

This quick, flexible and seller-friendly solution of tapping into what makes up about 60% of a business’s funds opens up a tool for growth and an opportunity to compete with larger companies.

For example: A small owner has an opportunity to expand his operations into another part of town or in another city, but he needs working capital to make a down-payment on a new building or to outfit and buy inventory for a new distribution center.

By selling invoices – when the company owner chooses and at a price he’s willing to pay – from his best customers, he can access the working capital he needs to secure whatever growth investments he needs to make. Because the bidding is open to a global network of accredited institutional investors, the seller gets a competitive cost of funds.

Based on the amount of working capital needed, the seller chooses which invoices to list, how much he wants for them and how much he will pay for the advance. This allows him to  finance  corporate growth opportunities, like opening a new storefront, with fewer restrictions and more control and flexibility than traditional  financing .

Billion dollar corporations had to start somewhere and many of them began as a one storefront business. Taking calculated risks, spending money and obtaining the right  financing  to meet their working capital needs, gave them opportunities to grow into much larger entities. Small and mid-sized businesses that have hopes of remaining competitive in their industry must look to growth and expansion- and they need a significant amount of working capital to do it.

Participating in this real-time auction for accounts receivable is an efficient and affordable alternative solution for accessing the funds. This can mean the difference between purchasing new equipment that makes production more efficient. And, as a result, making the business more competitive with its larger counterparts.

With this alternative solution for invoice  financing , the seller maintains complete control of his funds. He does not have to deal with the hassles of all-asset lien restrictions or covenants that can limit his spend flexibility and focus on business growth.

In business  finance , corporate entities that have the size and influence have an edge, but with invoice  financing  on the receivables marketplace, small and mid-sized businesses can not only keep up with the competition, but enhance overall financial performance.

Source by Andrew Stratton

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