The Bottom Line - Accounts Receivable Financing Increases Profits

The True Value of Accounts Receivable Financing

If you're considering working with Promotional Capital, you're probably wondering whether accounts receivable financing will ultimately make or save your company more than it will cost.

Most companies decide to finance their invoices because they can't afford not to do so. The true cost of Accounts Receivable Financing is therefore how much your company may lose by not doing so.

The Numbers Really Tell the Story:

	Current Business	After Financing
Annual sales	$600,000	$1,100,000
Cost of goods (40%)	(240,000)	(440,000)
Gross profit margin	360,000	660,000
Commissions (40% of GPM)	(144,000)	(264,000)
General & administrative costs	(90,000)	(100,000)
Cost of factoring	0	(42,000)
Net profit	126,000	256,000
Additional income from factoring accounts receivable financing		130,000
Percent increase in bottom line		50%

***This is a hypothetical projection for example purposes to show the increase in revenue/profit if a business utilizes financing services to increase cash availability. This does not account for purchase order financing. Promotional Capital LLC does not guarantee any similar financial results from providing its services.

 

It's important to understand the positive economic impact accounts receivable funding can have on your business. While each company and situation is unique, this type of financing usually produces the following results:

• Immediately provides your company the cash necessary to expand your business

• Increases your purchasing power by allowing your company to boost revenues and profits
• Promotional Capital's Purchase Order Financing program can provide the funds that may be required up front to pay suppliers for your new orders. This unique service resolves the working capital dilemma for promotional products businesses.
• Eliminates lost time that hurts your bottom line. No more warding off creditors, hounding your customers about overdue bills. Accounts Receivable Financing also cuts down time spent on bookkeeping. You can use this newfound time to expand your clientele, nurture current client relationships, and in turn, make more money.
• Funding your business with Promotional Capital relieves your company of bad debt and credit risk. Should you utilize our non-recourse factoring program, we assume the risk of non-payment (due to insolvency) for the receivables we purchase from you. We also provide extensive credit management services by doing a thorough credit history of each of your current and prospective customers, which we will review with you
• Invoice Financing helps build your credit, and will make it easier to obtain credit from vendors and other financial institutions. With adequate cash flow, you can use cash from our financing to clean up your own debts as well as pay overhead, salaries, and past due invoices. Just as importantly, this will serve to enhance relationships with your vendors and employees.
• Promotional Capital provides professional collection/payment follow-ups on financed invoices, so your company no longer has to cover the costs associated with having someone handle these jobs.
• With cash more readily available you can reduce costs by taking advantage of supplier, bulk purchase, or early payment discounts.
• Our financing program is a win-win situation: without interrupting your usual business cycle and customer relationships, you can still extend credit to your clients, while enjoying a positive cash flow.

Ready to boost your bottom line?

Apply for financing services today!