How to Turn Your Receivables into Working Capital

November 28, 2023

So, you’ve got a growing business, but perhaps your cash flow isn’t as great as it needs to be. As a result, are you left wondering how to turn your receivables into working capital? Whether you’re selling a product or providing a service, Renasant Bank’s BusinessManager can provide the consistent operating capital you require.

What is Accounts Receivable Financing?

Accounts receivable financing allows small businesses to receive funding for their expenses while waiting for their invoices to get paid. Simply put, this line of credit turns your account receivables—including outstanding invoices or money owed—into immediate cash for your business. A business using accounts receivable financing commits some, or all, of its outstanding invoices to a funder for early payment in return for a fee. Instead of directly paying back” the money lent through this method, the actual payments received from those invoices are used to cover repayment of the financing provided by a lender.

The ability to turn your receivables into working capital can help you get the cash you need to operate your growing business. Renasant will purchase these invoices at a negotiated rate and with those invoices in hand, make consistent, daily deposits into your account based on your long-term income–giving you the cash flow you need without the wait. Think about your accounts receivable and those outstanding invoices as collateral, and this form of financing to receive early payment on those outstanding invoices.

What are the Benefits?

It’s no secret that no matter how well a business may be operating, invoicing and payments can be inconsistent and unpredictable. Every business owner has to deal with late payments. Though a slight delay here and there might not be a big problem on a smaller scale, it can quickly worsen and drag down the consistency of your entire cash flow, which ultimately limits your ability to do business.

Working capital requirements can be met with ease. Waiting on payment for invoices is no longer necessary to meet immediate cash requirements. The days of waiting weeks and months on end for payment submissions after invoicing are over; quick access to cash when you need it the most is here. Renasant Bank’s BusinessManager provides you with the working capital you need fast, allowing you to capitalize on the next big opportunity.

Renasant Bank’s BusinessManager provides more flexible options than traditional financing. If you’re just starting a business or your business is struggling, it can be difficult to get a small business loan. To secure adequate financing, banks typically want a business to have been in operation for a significant period. A solid credit score, working capital in the six-figure range and collateral from personal or business assets are almost always required. However, if you’ve leveraged all your assets for collateral, you might be stuck. Fortunately, with BusinessManager, your unpaid invoices essentially work as collateral.

One of the greatest benefits of Renasant Bank’s BusinessManager is that you will continue to perform your work or service as normal—we handle everything necessary behind the scenes, without your customers, contractors or clients ever experiencing a change.

Using Renasant’s online banking with BusinessManager, you can submit your invoices quickly on an ongoing basis, and needed cash is deposited into your account by the next business day. By financing your accounts receivable through Renasant Bank’s BusinessManager, you don’t have to worry about cash flow anymore.

Is Accounts Receivable Financing Right For Me?

Accounts receivable financing is best suited and most beneficial for a business with a large form of receivables. BusinessManager is the perfect solution for fast-growing businesses frustrated with an inconsistent and unpredictable invoicing and payment system and looking for fast access to short-term working capital. This form of financing is best suited to small business owners and entrepreneurs who:

  • Find themselves faced with a short-term cash flow gap (30–90 days)
  • Need cash reserves for a business opportunity and/or seasonal demands
  • Are expanding rapidly
  • Need help paying regular business expenses
  • Want to make improvements to their businesses

By purchasing your accounts receivable at a negotiated rate—both initially and on an ongoing basis—cash flow challenges become a thing of the past. This form of financing places the focus on your customers, not you. And, in doing so, significantly reduces the prospect of taking on clients with less than reliable track records on repayment.

Easy access to a working capital frees up your resources—giving you greater peace of mind. As a result, you can focus on those activities that are more productive like selling and marketing. The time that you have been spending on chasing down and collecting payments from your clients can now be devoted to nurturing and building your business. Renasant Bank’s staff has the knowledge and experience to help ease the growing pains of your business and help you turn your receivables into working capital. You run your business, let us worry about waiting for 30, 60, or even 90 days to get paid for your invoices.

BusinessManager is highly customized to fit your business’s needs and will grow as your business does over time without the need to take on additional, substantial debt. This is a lot safer than overextending and depending too heavily on short-term business loans, which often carry high-interest rates. Running a small business requires several tools and skills—and BusinessManager can be one of the strongest tools you have.

Let Renasant Bank’s BusinessManager team talk to you about using accounts receivable financing to grow your business today.

All loans or offers of credit are subject to credit and underwriting approval. Other fees, conditions, and restrictions may apply.