Category: budget

Solving the Emergency Fund Dilemma

What happens when you need to get hold of emergency funds real quick? How does one solve this financial dilemma? Luckily for us the team at Working Capital Partners is here to help us find the answers.

Truth be told, financing is a tricky and sensitive but equally important aspect to business. After all one cannot run a company without the cash to do so. How are you going to provide for your expenditures?

There are many sources of funds such as equity from shares of stock or the owners themselves. There is the use of retained earnings too to provide for certain ventures. Moreover, entities can reinvest their profits back into the business. Of course, let us not forget forms of credit such as bank loans and mortgages to name two.

Now, there will come a time when such sources are not available or not feasible given the situation. There will be emergency needs that need immediate source of cash that can release it within a few days’ time or weeks.

In times like that, businesses can take on other forms of financing that will enable them to generate cash real quick. Below are three of them.

  1. Invoice Factoring – This method allows entities to raise funds from their unpaid customer invoices. In exchange for the right to collect against them, the factoring company shall issue an advance equivalent o 80-95% of their value. The remaining percent shall be withheld and released only upon full collection from owing customers less the fees. This basically hastens the collection process and can take as fast as 24 hours.
  2. Receivables Discounting – Quite like factoring, it enables the release of advance equivalent to one’s receivables. However, what differs is that the collection function shall be retained by the company. After completion, it then goes on to pay off the financing agent plus fees. It likewise can be arranged in a day’s time depending on the circumstances at hand.
  3. Interim Financing – This is a type of short term loan taken out in cases where a permanent financing medium has already been employed but is seen to come later than is needed. The interim loan shall provide for the immediate needs and shall then be closed out by the main fund line once it arrives.


So which among the three options suggested by Working Capital Partners fit your needs?

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