Are you a contractor currently waiting on invoices to be paid so that you can pay clients? Receivables finance is your solution!
At Nova we do not believe in adding loans to your existing debts. We do believe in being resourceful and thinking of other ways that you can add funds to your cash account. We understand how important it is for a contractor to buy new materials and take on new jobs. Our receivables finance facilities will allow you to relive these financial burdens.
So how does it work? Receivable financing allows you to gain funds for your business by selling your accounts receivable. As a factor, Nova can buy your accounts for a discounted amount. Most of the time, you will get 80% of the total amount of your accounts receivables advanced to you when you submit invoices. Whilst, there are factoring fees that are attached to this service, compared to the amount you are going to receive, the discount and fees are worth it so that you can pay outstanding payments on time and maintain a reputable reputation as a contractor.
Working capital can be defined as the money that you require to keep your business running on a daily basis. The amount that your business requires can be computed using your current assets and your current liabilities. So, how can receivables finance help you get the working capital that you need?
First, receivables finance can provide you with a significant amount of cash, quickly. If you are short on cash and you need actual money to buy your inventories or pay your existing liabilities, you can rely on receivable financing. Your accounts receivable will be converted into cash that you can utilise for your everyday business activities and eventually for business growth.
Additionally, receivables finance allows you to reduce your current liabilities and improve your credit rating. Some debts can impact your business in a negative way if they are left overdue and in order to maintain or establish a good credit rating so banks and financial companies will lend you money in the future, you need to stay on top of outstanding debts. With receivables financing, you can pay your creditors now without applying for a new loan because it is never a good idea to pay a loan for another loan.
Overall, receivables finance can assist contractors to stay afloat and expand by providing you with working capital.