Next Day Funding explained, and how it can benefit your business.

To say that cash is the lifeblood of your business is an understatement. The more quickly you can get your hands on your money, the healthier your business will be. In recent years, Next Day Funding options have begun to give entrepreneurs access to their hard-earned dollars even faster, much to their advantage.

How funding for payments traditionally works.

Generally, you receive payments from customers throughout the day. At the end of that day, all of the payments received will be placed into a single batch and sent to the bank for processing. Eventually, often three to five days later, the money is deposited into your business account. Only then can it be accessed for immediate use.

Why do banks feel the need to hold your funds for such a long period of time, one that can be extended even more due to a weekend or holiday? It’s all about reducing their risk of being defrauded. While that is understandable, this practice stifles your cash flow and can prove detrimental to your business. The situation is even more difficult for businesses that make a high volume of credit card sales on weekends. In cases like this, they may not be able to use the money they have earned on these purchases until the middle of the next week. For new companies with razor-thin profit margins or during tumultuous economic times, these delays can turn into much more than a mere inconvenience.

What is Next Day Funding?

As the name suggests, this model gives businesses faster access to their money. As long as you batch before the cutoff time determined by your processing company, you are guaranteed to have your funds within a single business day. 

How Next Day Funding can benefit your business.

Next Day Funding is important for your growing commercial operation for several reasons. It allows you to do the following.

• Pay for inventory.
• Fund your payroll.
• Pay for insurance.
• Keep job-related materials in stock.
• Keep up with your bills to vendors and subcontractors.
• Budget for new projects, equipment upgrades, and other operational enhancements.
• More effectively manage your business’s accounts and bookkeeping.
• Gain the psychological advantage of being in control of your own money with a fast turn-around time. No one wants a bank to stifle their growth by blocking them from re-investing their own hard-earned funds in their growing business.

Most likely, you will be charged an additional fee if you take advantage of Next Day Funding. However, the benefits it provides may well make the expense worth every penny. The fact is that Next Day Funding can keep your financial lifeblood flowing throughout your business’s circulatory system, enabling you to finance what is most important to you and your customers.