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What If Accounts Receivable Finance Was the Perfect Answer to Your Cash Flow Financing?

An account of two worlds – one in which you have unlimited income a treadmill that you had daily income challenges that hamper your ability to grow and manage your business. A money flow financing solution is possibly the solution to all of your problems. In Malaysia business people and financial managers face, on a daily basis real world income challenges. Let’s consider an example at why a / r finance will be your holy grail of working capital financing. Cash flow financing goes by a number of different names in Malaysia that’s part of the confusion we’re always trying to wade through on our client’s behalf – various terms apply to this type of business financing. They include: factoring, invoice, discounting, A/R financing, etc. For the way you transaction is structured and what you are dealing with is really the key issue, not exactly what the financing is known as. Clients keep asking if they are an applicant for this kind of business financing.

There are some perfect candidates, so let’s consider a profile or two so that you can determine whether you fit. Generally you’ll have a / r that pay fairly regularly but they are occasionally slow – your general bad debt experience has probably been quite satisfactory. Your invoice and stated terms for your customers is Thirty days, but you know what, most of them appear to be paying in 60 and 3 months – that definitely appears to be the trend of clients we talk to. Does size count – In income financing it truly doesn’t – speaking generally for those who have at least $ 50,000 of invoices per month you’re a candidate for accounts receivable finance in Malaysia.

In fact corporations with many huge amount of money in receivables actually utilize this form of financing also. We hasten to say that more often than not how big your facility will affect your overall pricing. Within our experience you can potentially lessen the cost of your accounts receivable finance facility by close to 1% monthly for those who have a sizable facility. However, we spend several hours and lots of meetings educating In Malaysia business on factoring pricing that is grossly miss understood by most clients who look into this kind of business financing. Therefore the final point here is that you should not let your company size, or any other challenges you may be facing – (temporary financial losses, restructuring, etc) affect you capability to successfully achieve an accounts receivable finance strategy. Many times the decision to consider income financing of your receivables originates from directly related issues to collections – in some instances the slow pay nature of your client may be affecting your capability to purchase inventory or meet payroll – those are some typical factors that drive customers toward factoring. When you finance (in effect you are selling) your receivables under this type of facility you immediately receive an 80% advance in your invoice- that allows you to meet obligations and expand your business