Having direct access to capital is essential for any-sized businesses – but statistics show that customers are holding onto cash longer and paying later, leaving business owners without working capital for months at a time. Many B2B organizations choose to leverage their outstanding receivables for immediate access to working capital. This process is frequently referred to as invoice financing, receivables financing, or factoring – to name a few.
Businesses often use invoice financing as a means to fund a variety of business initiatives, including capital investments, purchasing inventory, and hiring new talent. Staffing agencies, for example, use invoice financing (also known as ‘payroll funding’ if you are making a list) to access capital quickly, thus avoiding interruptions to payroll.
Here are four ways invoice financing can improve your business:
In a classic scenario for growing enterprises – financial strain builds as the business grows and struggles to continue servicing their clients, all the while, the number of outstanding receivables increases. In these cases, the need for working capital rapidly heightens. Instead of battling the chicken-or-the-egg scenario that all too many businesses drown in, B2B owners can utilize invoice financing. At LSQ, clients can access cash trapped in unpaid invoices within 1 business day, allowing them to meet payroll, take on larger customer contracts, purchase materials, hire new talent, and invest in their business to fuel further growth.
LSQ approaches technology in a way that revolutionizes how business owners view their accounts receivables. We provide a complete view of invoice data, access to real-time reporting, on-demand credit checks for new, potential, or existing customers, and the ability to upload and request funds on any device.
Our technology enables businesses to streamline the way they operate, making processes more efficient and less time-consuming. With direct access to LSQ’s receivables management platform, Dashboard, business owners can organize themselves better by keeping their invoice information all in one, easy-to-access location.
You should expect any invoice finance company to provide add-on services like collections or invoice data-entry, which are great to save time and resources. At LSQ, we take this a step further by providing clients with additional back-office services like customer credit management, risk monitoring, and collections. Our clients are assigned a designated Account Management team as their single point of contact for funding and financial insights.
A goal many of our clients share is to qualify for a traditional bank line of credit eventually – and we get it, you can’t beat those rates. But it is a hard road to this goal for a lot of business. Invoice financing serves as a great way to provide funding for B2B or B2G enterprises that is off balance sheet, allowing them to grow, become profitable and build up a track record over time to improve their credit rating. As a result, almost 40% of LSQ’s clients eventually qualify and graduate to a bank line of credit. As an LSQ partner, we will waive termination fees for our partner prospects when the client returns to the referring partner for financing.
If a bank line of credit doesn’t suit the needs of a client, LSQ is flexible enough to scale with their working capital needs all the way up to $50 million in outstanding receivables.
For B2B enterprises seeking to improve cash flow quickly, LSQ is a leader in working capital solutions, providing transparent pricing, access to the largest credit facility in the market ($50MM), and expediting the cash conversion cycle to help level the playing field. Unlike invoicing and traditional financing, which can take weeks or months to the process, LSQ can fund in days, if not hours— all without steep pricing or excessive stipulations.