Commercial financing for small to mid-sized businesses requires innovation. Business owners have to be pragmatic as it pertains to growing their businesses. But, they also need money when opportunity comes knocking. One way they are taking control of the business growth is using a commercial financing process which allows them to auction off their accounts receivable.
Here’s how it works:
1. Apply online – The receivables auction marketplace offers a credit card applicatoin for membership online. The little to mid-sized company owner can fill this out in about 15 minutes. Once the applying and necessary financial documents are received, approval for membership takes about a couple of weeks on average.
2. Download auction application – Once approved for receivables trading, the brand new seller can download the applying to their computer. This Mezzanine financing Dorset desktop application provides access to the live, online receivables auction platform where buyers and sellers have 24/7 access to auctions and transactions.
3. Choose invoices – Now, the seller is ready to choose the accounts receivable they would like to post for auction. As long provided that the total auction amount exceeds $10,000, the seller can post any commercial invoices they want.
Tip: The best way to have cash quickly and efficiently is to create invoices of well-known, investment-grade account debtors with great credit histories. These tend to have snapped up quickly and receive the most effective rates of capital.
4. Set parameters and post – The vendor maintains control by setting the parameters of the auction. The vendor decides the minimum advance amount they will accept from bidders, the utmost discount fee they will pay and just how long the auction will last. The vendor can decide to run it from 3-10 days.
5. Sale transaction occurs – There are two ways this may occur. Once the auction closes, the Buyer with the greatest bid that meets the parameters set by the seller wins the auction. The other option is that the seller can set a “Buyout Price “.This is comparable to the “buy it now” option on eBay. Each time a Buyer agrees to the “Buyout Price” the auction is immediately closed and awarded to that particular Buyer.
6. Get commercial financing fast – Once the sale experiences, the funds are electronically deposited into an take into account the seller. This happens within 24 hours of the auction close.
With money in hand, possibly in less than one day, small to mid-sized business owners give themselves a bonus within the competition. They have the methods to grow their business now as opposed to looking forward to invoice payments in the future in. Commercial financing using their accounts receivable allows them to tap into funds that normally take 30-90 days in the future in.
Typically, about 60% of a small business’working capital is sitting dormant in the form of invoices. Put these assets to work by getting this money now as opposed to later. Through invoice financing, small to mid-sized business owners can control the fate of the ventures with little risk, few restrictions and total control. Opportunities won’t wait.