Accounts receivable financing (A/R financing), sometimes known as a ledgered line of credit or invoice financing, is a great solution for breweries that need more funding that is not available from traditional lenders. Many breweries need additional cash flow to support seasonal demands, growth, business opportunities, or solve a short-term cash need. Accounts receivable financing provides your brewery with flexible and immediate cash that will give your brewery the opportunity to grow, restructure, take advantage of supplier discounts, hire additional employees, or even to fund payroll. With our accounts receivable financing options, you can access cash without having to give up equity in your brewery, and it is less restrictive and expensive than equity financing. A/R financing can increase or decrease based on your current breweries size and needs, allows you to gain administrative support to manage your receivables without additional staff, and gives you access to cash when you request it (based on your eligible accounts receivable).
This type of asset-based financing allows breweries to get instant access to working capital without jumping through the hoops or dealing with the lengthy waits associated with getting a bank loan. When a brewery leverages its accounts receivables to boost its cash flow, it also doesn't have to worry about repayment schedules, and instead of focusing on trying to collect bills, it can focus attention on other core aspects of its business, brewing beer!
How Accounts Receivable Financing for Your Brewery Works
After you invoice your customer for goods or services completed you provide a copy of the invoice and supporting documentation. LVRG's accounts receivable partners may then advance up to 90% of the eligible invoice to you, often within 24 hours. Our professional and efficient invoice management team follows up to help ensure that your customer pays according to your invoice terms. Once we receive your customer payment, we’ll release the remaining 10% to you, less an administrative fee. And, with our timely detailed web-based reporting, you can check to see who has paid and who has not 24/7.
This accounts receivable financing process will free up valuable time and allow you to what you do best, service your customers, brew more beer and generate new business. Receivables management is proven to shorten payment turnaround time, which in turn, ensures better cash flow for your brewery and reduces interest expense. It also facilitates increased communication with your customers in a positive and professional manner, thus allowing you to stay on top of damaged goods, lost shipments, misplaced or disputed invoices, or keeping payments current.
And, because this form of financing allows you to access more cash as your brewery grows, or less if you need less, you can ask us to either ramp up, or scale back as you deem best for your business.
Accounts Receivable Financing Highlights:
1. Primary Transaction Size - Start-Ups to $5 Million
2. Business Credit Type - Accounts Receivable Invoice Financing
3. Advance Formula - Up to 90% of Eligible Accounts Receivable
4. Advance Frequency - Weekly (or as often as daily)
5. Services -
- Customer credit reviews for new and existing customers
- Invoice processing
- Collection services (in some cases)
- Customized management reports
6. Accounts Receivable Financing Benefits -
- Are flexible, can increase as your business grows, and can decrease when you choose
- Make it easy to transition back to conventional banking
- Make paying off loans and making payroll worry-free
- Allow you to meet seasonal demands
- Give you the opportunity to reinvest in business and fund marketing to grow your brewery
- Receivables management allows you to focus on your core business, brewing beer
- Allows you to take advantage of volume or early payment purchase discounts
7. A/R Benefits -
- Competitive pricing
- Fast response time including:
- Proposal turnaround within one day
- Closing in as early as 7-10 days
- Cash for invoices within 24 hours
What is the difference between accounts receivable finance and a bank loan?
Accounts receivable financing is a quick, flexible way for your brewery to generate cash flow. Here is how accounts receivable finance differs from a bank loan or line of credit:
- Accounts receivable financing is not a loan. You assume no debt. However with a bank loan you repay principal and interest on your loan.
- In accounts receivable finance rates can be adjusted throughout the life time of the financing program. Using a bank loan your annual percentage rate is locked long-term.
- With accounts receivable financing the amount of money you can finance grows as your receivables grow. In contrast using a bank loan, the money you borrow comes with a cap or a limit.
Is A/R Financing The Right Solution For Your Brewery?
Your brewery is unique with working capital needs all its own. Our professional, experienced team will work with you to understand what accounts receivable financing solution best fits your breweries business model and cash flow needs, and a team of financing specialists will create a working capital solution specialized for you.