Selling Underperforming Receivables Turns Today’s Cash into Tomorrow’s Revenue
In workout or fast growth situations, companies seeking to maximize liquidity to either execute an operational turnaround of the business or focus on fast growth situations should consider selling assets as one option to raise much-needed liquidity quickly. Banks and finance companies often exclude delinquent accounts receivable from their borrowing base calculations, negatively impacting the borrower’s financial resources. While these accounts receivable may be collectible over time, selling them can provide immediate working capital, facilitate timely payment of necessary operating expenses, or provide cash flow for opportunistic inventory purchases. If slow-paying or non-paying accounts receivable negatively affect your business, it is time to turn to professional help and consider selling these receivables.
VION Investments specializes in purchasing underperforming and non-performing commercial and consumer accounts receivable and has the tools and understanding of how to maximize payments. By selling underperforming receivables, businesses are able to free up liquidity for growth. What’s needed? VION requires a master data file including payment information, who the customers are, the amount of payment, and interest rates (if applicable). VION will look at receivable performance, the underlying terms of the contract, and the default provisions. These items are all essential to the underperforming receivable purchase process.
When buying receivables, VION will likely make a one-time, upfront payment giving the company instant cash flow. However, there are some cases when staged payments may be beneficial. This payment usually involves a little more risk but also provides more cash to the seller. VION always looks at the company needs to assure structuring the transaction helps grow the business.
If your company is having trouble collecting its receivables, selling underperforming receivables is an excellent alternative to free up liquidity and help your business get back on track—every dollar matters in workout or turnaround situations. Cash generated today from the sale of accounts receivable, if wisely redeployed can generate revenue tomorrow to support your business’s ongoing operations.