How does your company define “bad times”? For most companies, the bad times are when the company is struggling with cash and cannot meet all of its financial obligations. This can happen for several reasons, but the most common reason is a recession or economic downturn of some sort. The recession could be global, or it could be an economic crisis just in your industry. If it is something that is happening just in your industry, then it can be a bit more intimidating because it is hard to fight something that is so specific.
When your company starts to hit economic bad times, that is when you should be going to your contingency plans for survival. The frustrating thing is that you look at the aging reports every day and you see more than enough invoiced sales to help your company maintain its current operations. The problem is that the agings are getting older and older, and it can be especially frustrating when customers that normally pay on time start paying late as well. That is the nature of a recession or an economic downturn and only the companies that have the best plans in place are the ones that will come out on top.
The real issue with a recession is the effect it has on your company’s cash flow. When the economic conditions surrounding your company are good, then the cash flow is going to be sufficient enough to meet ongoing obligations and keep financial stress off the business owner. But when the economy starts to fail, then important parts of the company start to suffer. Cash flow is responsible for maintaining payroll, paying monthly overhead costs and meeting immediate financial obligations that do not involve extended invoices. Without that cash flow, the company will struggle.
It can be easy to take cash flow for granted when you are seeing your best customers pay their invoices on time during a strong economy. But when your top clients start letting their invoices go 30, 60 and 90 days past due, then you start to feel the crunch that comes with a slow cash flow. You also have to deal with the decrease in sales volume that comes with a recession. You can put pressure on your sales staff to maintain revenue, but there is only so much your sales professionals can do when the economy is bad.
One of the natural reactions by many companies to an economic slowdown is to panic. There are knee-jerk reactions caused by the company’s deteriorating financial status. But if you just reign in the panic and stop to plan things out, you will realize that you do have options and there is a way to stabilize cash flow and get your company’s finances under control. As long as you have invoiced sales coming in, you have a way of funding your company’s financial needs for the long term. The key is to find way to turn the past due invoices into cash that your company can really use.
If you are reading this, then you should be congratulated for exploring the cash flow options that are available to your company in a bad economy. Instead of pushing the panic button, you have decided to take the measured approach and look for a real solution. If you have never heard of factoring companies, then now is a good time to get yourself introduced to the concept. Commerce Commercial Credit is the recognized world leader in factoring services to small and medium sized businesses. We can show you how factoring will stabilize your business and create the cash flow you need to survive bad economic times.
As a premier factoring company, Commerce Commercial Credit is not a bank. We do not offer loans that add long-term debt to your company’s bottom line. We advance you cash based on the face value of your outstanding invoices, and then charge a small lending fee in the process. We do not charge a set-up fee, a facilities fee and we do not have any per invoice or per month minimums. We can approve your account and have it set up in five business days or less. Once we have your account in place, we can advance you funds against approved invoices in 24 hours.
During a recession, every invoiced dollar becomes critical. Instead of waiting for months to get your money and allowing your company to fall deeper into a financial pit, we get you that money on or before the invoice due dates and create a cash flow that will stabilize your organization. We allow you to make those important payments, such as payroll, on time and in full. You will not have to worry about bank lending and you will not have to wonder if this line of credit we have helped you to create will ever run out. As long as you are invoicing sales to creditworthy clients, then we will supply you with the line of credit you need to do business.
Once you get involved with a factoring company such as Commerce Commercial Credit, you will have a stable cash flow at a time when your competition is struggling. We will be that financial secret weapon that allows your company to stay intact during a recession, and we can even allow you to start making growth plans while the rest of your industry is struggling. All you need to do is make sure that you keep bringing in invoiced sales and we will do our part to keep your bank account filled with cash.
Our application process is simple and we never make a decision based on your company credit score. All of our decisions are based on the credit status of your clients, which allows us to help companies with good, bad or no credit at all. We can also help you if your company has tax liens against it, or if your company has just come out of bankruptcy. Factoring invoices is the way that you will get the cash you need during tough economic times, and it is how your company will emerge as an industry leader when the tough economic times are finally over.