Being able to bridge the gap between your companies receivables with paying the monthly bills can be difficult, especially in a declining economy. However I may have good news for you if you’re having problems in this area of business.
The Receivables Exchange, an online marketplace for real-time trading of accounts receivable, today announced that it has launched a trading platform to conduct live trading of accounts receivable. At The Receivables Exchange, U.S. businesses (Sellers) are able to increase their cash flow and free up their working capital by having their outstanding receivables bid on in real-time by a global network of institutional investors (Buyers).
For businesses, accounts receivable represent the most under-utilized asset on the balance sheet – with more than 60% of working capital tied up in outstanding invoices. The average turnover of receivables is 48 days, meaning most businesses wait nearly two months before collecting cash owed to them by their customers – essentially extending them a free loan that they could otherwise reinvest into growing their companies. By selling their receivables on the Exchange, businesses can free up cash to accelerate re-investment into their businesses such as hiring more employees, expanding operations, investing in infrastructure and delivering more goods and services, all as a result of their strengthened liquidity and financial position.
The Receivables Exchange is changing the landscape of business financing by providing a new dimension in working capital management. The Exchange connects millions of small and mid-sized businesses (Sellers) in search of capital to a global network of institutional investors (Buyers) looking to broaden and diversify their portfolio. Buyers get direct access to an $18 trillion new investable asset; Sellers are introduced to a new source of liquidity by having their receivables competitively bid on in real-time by multiple Buyers.
“The Receivables Exchange was founded on the fundamental belief that America’s small and mid-sized businesses should have better access to working capital,” said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange. “In today’s credit crisis, we’re hearing from CEOs and CFOs across the country that the need has never been greater for them to identify alternative funding sources to reinvest into their businesses in order to maintain their success.”
Companies of all sizes – from under $10 million to over $150 million – have been signing up to use their receivables to accelerate cash flow. Members span a diverse range of dozens of industries, including manufacturing, technology, transportation, distribution and staffing – all realizing the strategic advantage of monetizing their accounts receivable, particularly in today’s troubling credit crunch.
“We’ve been fortunate to experience tremendous growth despite our cash flow constraints, but it’s imperative – especially in this economic environment – that we find faster, more competitive ways to improve our cash flow,” said George Rosero, Founder and CEO of Atlanta Pediatric Therapy. “The ability to trade our receivables on the Exchange is going to answer our needs for a faster way to realize even greater growth.”
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