Earlier, we discussed the importance of accounts receivable (AR) finance as a valuable lever for companies in survival mode during an economic downturn.
Fortunately, not all businesses are in that position. But that doesn’t mean that AR finance isn’t a valuable tool for them. In our nearly 30 years of business, we have seen that AR finance can be a powerful tool for growing a business by providing access to immediate working capital and improving cash flow. (In fact we recently provided a $30 million AR finance facility to a pharmaceutical company to support their growth trajectory.)
For companies looking to scale, AR finance allows them to:
Invest in Business Expansion
With LSQ AR finance, businesses can access funds quickly (often within 24 hours), allowing them to invest in expansion opportunities. Whether it’s opening new locations, launching new product lines, or expanding into new markets, having readily available working capital can fuel growth initiatives.
With added working capital, businesses can invest in valuable initiatives like:
- Research and development;
- Marketing and sales efforts;
- Added production capabilities; and
- Strategies to acquire new customers.
Adequate inventory is crucial for meeting customer demand and expanding market reach. LSQ’s AR finance offerings enable businesses to purchase inventory in bulk or take advantage of volume discounts, thereby increasing their competitiveness and ability to fulfill larger orders.
Many businesses experience seasonal fluctuations in demand and sales. AR finance can help bridge cash-flow gaps during slower periods, ensuring operations continue smoothly and accounts payable obligations are met and enabling businesses to be prepared to meet peak demand seasons. Meeting those accounts payable obligations are critical in maintaining and improving relationships with suppliers. And with better relationships could come better payment terms and discounts, which further improve working capital and maximize cost savings and profitability.
Reduce Debt Burden
If a business is burdened with existing debt, accounts receivable finance can help reduce that burden by providing a debt-free form of financing. This can improve the business’s financial health and position it for growth without leveraging future liquidity.
LSQ’s AR finance options are a versatile financing solution that empower businesses to pursue growth opportunities, invest in their future, and respond to market dynamics effectively. By unlocking the value of outstanding invoices, businesses can access working capital quickly and strategically allocate resources to drive sustainable growth and success.
LSQ offers flexible AR finance solutions in facility sizes ranging from $250,000 to $100 million. In addition to high-growth companies, we can help businesses of all sizes and stages solve for challenged credits, tripped covenants, high debtor concentrations and bankruptcies.