Business opportunities stuck at the business door sometimes raise the question – “Can we afford them financially?”. Usually, a deal with high profits also brings high expenses. The problem is that to close the deal and provide the service/goods, the revenues will come in the future, and the costs will decrease now, which makes the business owner hesitate to take the deal.
The known solutions
Let’s explore some known solutions to this financial puzzle.
Cash discount—In many industries, it is customary to pay suppliers current plus 120-30, and suppliers in these industries offer a generous discount in exchange for cash payment to improve their cash flow.
A bank loan—The banks in Israel provide different tools for businesses, such as short-term loans or credit that can be a financing tool. The disadvantage of this type of loan is that the bank uses the framework that exists for the business, and the obligation is also affected.
Before you bring more partners into the business, offer a discount on the price, or reduce your bank credit limit, we recommend you find out about the factoring method—a method of financing by discounting current commercial debt.
So, what exactly is factoring?
In simple terms, it’s a method of financing by discounting current commercial debt. For a more detailed explanation, you can visit our factoring page.
Financing using factoring and flow management
In conclusion, the fixed expenses in the business create cash flow difficulties due to payment terms. A factoring loan can change the entire economic conduct of the business and finance the gaps that are created in the cash flow.
It is essential to know since the loan repayment comes from the company that owes the invoice (the one that received the service/goods from you), your financial situation and your flow do not affect the terms of the transaction. RTMI provides the financing for the invoice, mainly checks the economic strength of your client and the invoices, and allows you to easily receive a financing balance for the business without exhausting bureaucracy.
