Protecting Your Business from Client Bankruptcies

If the pandemic taught business owners one thing, it was that adaptability is the only way to succeed. Trucking companies had to shift routes and customers to overcome low rates from their usual shippers. Manufacturers switched from their usual product lines to medical equipment and PPE. However, there were still businesses that could not escape the economic uncertainty and had to shutter their doors for a number of reasons, leaving their creditors unpaid. No one can predict when internal or external forces will cause a business to go under, however, there is a way to protect yourself against client bankruptcies.

Delays in Payments

If you issue invoices to your clients, they probably have staggered payment schedules of 30, 60, or even 90 days. This may be a standard practice, but a lot can happen in that time. Your clients may face unexpected obstacles or expenses that cause their finances to take a downturn. A market shift or an advertising misstep can greatly lower their value and reputation. Yet during that time, your business is still waiting on payments. Sometimes, those clients may wait until the last minute to pay their invoices. Other times, those receivables may age out into collections. In dire cases, you may receive a notice that your client has filed for bankruptcy. So how can you avoid these scenarios and get the revenue you are owed quickly?

Accelerating Your Cash Flow

One way to safeguard your business against the client bankruptcies is to use invoice factoring. Invoice factoring is non-recourse, so you get money regardless of what is happening on your client’s side of the equation. Additionally, invoice factoring is fast, so unpaid receivables are converted to cash within a single day. This eliminates long waiting periods, as well as the need to perform collections. Factoring allows your business to stay on top of accounts receivable and not have to worry about the future of your clients, so you can focus on your own success.

Single Point Capital provides fast and efficient factoring services, and we make funds available to you within a single day. We also give you the tools to check on the credit status of your clients, so you can make informed business decisions. Contact Single Point Capital today to get started.