You’re counting on getting the revenue that you’ve earned, but your accounts receivable may have potential value and unique benefits that you haven’t been taking advantage of. Here are some of the most important things that you need to know about how to use uncollected revenue to facilitate access to working capital. 

Avoid Long Turnaround Times

Qualifying for small business lending opportunities to pay for sudden operational needs can be difficult if not impossible. Traditional small business loan programs have intensive application processes. Owners may have to wait several months to get approvals. With accounts receivable financing, you can get the working capital that you need to address unforeseen expenses or seize a new development opportunity.

Mitigate Risk Exposure

When clients don’t have to pay you right away, it leaves you in a precarious and uncertain position assessing the intrinsic value of receivables as an asset. Despite your general expectation of payment for the goods or services that you’ve provided, you have to recognize that collections can become problematic with any type of account in short order. 

It’s also worth considering running afoul of state regulations governing collections practices could give rise to liability concerns or even have the effect of enjoining further collection attempts. Furthermore, having to chase people for payments can tend to take up a fair amount of staff time. Selling collectible interests outright spares you from expending any further effort on getting payments. 

Use Your Resources Strategically

Saving yourself from having to allocate resources towards collecting payments and reconciling clients’ accounts isn’t a benefit that you’d realize from an accounts receivable financing option in the form of a loan using receiving as collateral. So long as you make good on your payment obligations in a loan’s terms, some or all of the principal balance of receivables remains yours. 

You’ll continue pursuing payment, and carrying on with your regular payment processing activities won’t present any additional burden simply because the receivables had once been used as collateral. In other words, you won’t have to pursue payments doggedly and you can expect to receive them in the normal course. Most of the most highly valued receivables that lenders want to see offered as collateral aren’t aging out and instead have just been created. 

There are numerous ways to harness the full potential value of your accounts receivables. This key asset could help give your business some breathing room and also create access to capital-backed growth initiatives.