A company that is having a hard time maintaining a decent cash flow will find itself running into all kinds of problems. Not only will payroll be affected, but the company's ability to keep vendor accounts current will also run into issues. Every company has payroll funding issues that can cause problems when it comes to sustaining operations.
The ability of a company to supply stable funding to sustain payroll can often depend on the company's financial history. But when you start to understand that a company's financial history and its credit score are not the only determining factors in setting up a reliable source of funding for payroll, then you can start to see all of the options that are available. In almost all cases, a reliable cash flow can be the perfect funding source for a company to meet its financial needs. The issue is how to develop a sustainable cash flow that will be there when the payroll bill comes up due.
Stable funding for a start-up is almost impossible to supply through bank funding. The reason is that banks generally frown upon companies that do not have a strong financial history. When an entrepreneur develops the business plan for his start-up, he will usually figure out how much funding he will need to sustain the first three to six months of operations. The hope is that invoiced sales will allow the company to meet payroll obligations when the initial funding runs out. The reality can be a very different situation.
When a start-up takes on invoices from creditworthy clients, the start-up is relying on those clients to pay their bills by the invoice due date. Many customers do pay their bills on time, but others allow their invoices to go 30, 60 and even 90 days past due. When a start-up runs out of initial funding in the third or fourth month of its existence and it is suffering from slow cash flow due to past due invoices, then it has to find a stable funding option that does not involve bank lending.
A company with good credit but slow cash flow may find itself borrowing money to meet payroll more often than it meets payroll with cash. Since the company has good credit, the assumption is that it will always be able to borrow what it need in the form of a bank loan or a bank line of credit. But a company with good credit can often find out that even good credit has its limits.
Every company has a subjective ceiling that it reaches when it comes to borrowing money from a bank. A bank loan or line of credit that threatens to exceed that limit will either not get approved, or it will get approved with an extremely high interest rate. In the end, a company with good credit that relies on bank lending for its funding to meet payroll is doing more harm than good to its own bottom line.
An established company with bad credit has very few options when it comes to finding alternatives to cash flow to satisfy payroll. A bank loan can take weeks to process and the company's bad credit may prevent the approval of any kind of corporate loan in the first place. The bank line of credit may be an option, but excessive use of the line of credit will cause a rise in interest debt and it will also result in the loss of that line of credit as a funding option.
Most companies with bad credit find ways to fund their operations, but those options start to diminish as time goes by. There will come a time when the company will want to rebuild its credit and stop relying on bank financing to meet payroll, which means improving its cash flow and getting more from its invoiced sales.
The most reliable form of funding any company can get for its payroll obligations is its cash flow, and Capital Credit has the flexible accounts receivables funding programs to make that efficient cash flow happen. Capital Credit has helped small to medium sized businesses all over the United States to meet their payroll needs and improve their overall credit profile by strengthening their cash flow.
The true financial strength of any organization is its ability to generate invoiced sales. The fact that a significant contingency of those invoices go past due should not affect your cash flow. Capital Credit uses your outstanding invoices as collateral and advances you cash in the amount of the face value of your invoices, minus our administration fees.
We invite you to check out our website and see the variety of invoice funding services that we have to offer and we can put together a custom funding on receivables for your company that draws on your invoiced sales and turns your invoices into the cash flow you need to meet all of your obligations.
Capital Credit uses asset-based funding to keep the cash flowing to your corporate bank account. We can approve your application the same day that you submit it to us and we can set your account up in less than five business days. After your account is set up, all we need is legitimate invoices to creditworthy clients to get your cash flow moving.
We use your customer's credit scores to make all of our decisions. That is how we are able to offer our services to companies with bad credit and start-ups with no credit at all. If your company has good credit, then preserve that good credit by letting Capital Credit set up a receivables-based line of funding that meets your financial obligations.
We have the custom financial solution you need to achieve a stable source of funding for your ongoing payroll obligations. We let you use your cash flow to pay your company's way and we help you look forward to your company's growth and success.