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’re taking control of their business growth is with 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 an application for membership online. The small to mid-sized company owner can fill this out in about 15 minutes. Once the application and necessary financial documents are received, approval for membership takes about two weeks on average.
2. Download auction application – Once approved for receivables trading, the brand new seller can download the application to their computer. This Mezzanine financing Dorset desktop application provides usage of the live, online receivables auction platform where buyers and sellers have 24/7 usage of auctions and transactions.
3. Choose invoices – Now, the vendor is ready to choose the accounts receivable they wish to post for auction. So long as long as the sum total auction amount exceeds $10,000, the vendor can post any commercial invoices they want.
Tip: The best way to get cash quickly and efficiently is to post invoices of well-known, investment-grade account debtors with great credit histories. These tend to get purchased quickly and receive the most effective rates of capital.
4. Set parameters and post – The seller maintains control by setting the parameters of the auction. The seller decides the minimum advance amount they’ll accept from bidders, the most discount fee they’ll pay and just how long the auction will last. The seller can decide to operate 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 fits the parameters set by the vendor wins the auction. One other option is that the vendor can set a “Buyout Price “.This is similar to the “buy it now” option on eBay. Whenever 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 goes through, the funds are electronically deposited into an account fully for the seller. This happens within 24 hours of the auction close.
With money in hand, possibly in as low as 1 day, small to mid-sized business owners give themselves a plus on the competition. They’ve the way to grow their business now rather than looking forward to invoice payments ahead in. Commercial financing utilizing their accounts receivable allows them to tap into funds that normally take 30-90 days ahead in.
Typically, about 60% of a small company’working capital is sitting dormant in the proper execution of invoices. Put these assets to work by getting this money now rather than later. Through invoice financing, small to mid-sized business owners can control the fate of their ventures with little risk, few restrictions and total control. Opportunities won’t wait.