Cash is King: Using Accounts Receivable Financing for the Liquidity to Keep Your Business Running


By Bibby Financial Services

16 May 2018

When running your business a cash shortage can be a nightmare. You have to pay bills, pay staff and order the goods that keep your business running. Which can you let slide if cash comes up short? Even businesses that are performing well and profitable encounter cash flow difficulties. With long payment terms on invoices, your business can be in the green but still not have access to the liquidity needed to keep up with day-to-day activities. When you have taken on a big order, have to purchase supplies, payroll is coming up and your outstanding invoices still haven’t been paid, where do you turn?


This is where already having a funding partner is key. Traditional lending from banks and ‘quick-cash’ advances for your business create a new bill to be paid every month. The more you need cash, the higher the rates, creating a negative feedback loop of lending that takes profitable businesses far into debt. Merchant Cash Advance firms offer cash in just days, or even hours, with simple paperwork but include frequent payments (sometimes even daily!) and high-interest rates. Often, traditional bank loans are simply too cumbersome to quickly provide for short-term business cash needs.


There is another solution. Accounts receivable financing services allow factoring of receivables, turning customer invoices into the cash you need to run your business. By using accounts receivable financing also referred to as invoice factoring you create cash without adding another payment to your liabilities each month. Invoice factoring works by providing your business with the majority of the value of an invoice (Bibby Financial Services typically provides more than 90%). The funder, which is the company providing accounts receivable financing then collects on the invoice for you, saving your company the time and headache of collections calls. Once the invoice is collected, your business receives the remainder of the balance, less fees for the service. By using a funding partner to factor receivables your business gets the benefit of professional invoicing and collections support services in addition to critical liquidity without any debt.

Quick-cash services want you to stay in debt, bank lenders see your business as nothing more than a number. When funding your business, you want a partner that understands your unique circumstances and wants to work with you for continued success. The key is working with a firm who not only provides invoice factoring but actively strives to be your partner and customizes its financial solutions to meet your business’ needs.


There are many companies who factor receivables. However, Bibby Financial Services (BFS) prides itself on building and maintaining close relationships with the companies we partner with. BFS provides a service but is also a partner wants to understand your business and its challenges - not just look at your financials and tell you what product to use. To learn more about working with an alternative lender and the solutions one can offer, contact BFS today at (877) 882-4229 or get a quote so one of our business finance experts can help you directly.

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