We live in a time when many parts of the country are experiencing record low unemployment rates. At the same time that so many companies are struggling to find all of the employees that they need, they are also looking for ways to meet payroll for the employees that they do have. Fortunately, there are accounts receivable and working capital funding strategies that can help many of these businesses succeed.
Accounts receivable financing companies offer a number of options that can help businesses of all size find the capital that they need to manage their expenses while they wait for the income from customers who only make their payments once a month.
Invoice Factoring Solutions Are Options That Many Companies Use on a Regular Basis
Did you know that small businesses, defined as those businesses with fewer than 500 employees, account for 99.7% of all business in the U.S. Many of these small businesses, however, do not have the working capital that they need to navigate making payroll, paying rent, and dealing with unexpected expenses. And while many of these companies have many customers who make monthly payments, these payments do not always arrive in time to pay specifically dated expenses. Consider some of these facts and figures about the many times when invoice factoring companies and other working capital funding strategies are an advantage:
- 82% of businesses that fail do so because of cash flow problems, according to a U.S. Bank study.
- 60% of invoices are paid late, so many businesses struggle with having the money that they need to meet their own bills.
- U.S. small businesses could collectively hire 2.1 million more employees if all invoices were paid on time. This would also reduce unemployment by 27%.
- Unlike a personal credit score that has a range of 300 and 850, business credit is scored on a scale from 0 to 100.
- $10,000 is the average amount of startup capital required by a small business owner, according to the Wells Fargo Small Business Index.
- 40% of new entrepreneurs in the U.S. are now women, and the number of new women-owned businesses is growing at double the rate of male-owned businesses, according to data from Kauffman.
Finding a way to succeed when low unemployment rates are forcing to employers to pay higher salaries can be a problem, but working capital funding strategies offer a number of options to companies of all size.