Get Cash for Your Accounts Receivables

The Receivables Exchange, an online marketplace for trading accounts receivable just received $17 million in Series C funding from Bain, bringing total investment in the company to $30 million.

According to The Receivables Exchange, the majority of companies have more than 60% of working capital tied up in A/R, which limits their ability to reinvest in their core business and grow. The Receivables Exchange claims to offer a solution: after registering, companies can post receivables to the site, set the parameters for an eBay-style auction (duration, minimum price, etc.), and watch the receivables get bid on by a network of accredited institutional investors. The typical auction lasts one day, and sellers receive their funds the next business day. According to testimonials, regular users of the platform have been able to reduce cash conversion cycles, smooth cash flow, and normalize DSO.

So if your startup or expansion stage company is in need of cash and has some built-up A/R, consider auctioning off your receivables. The cash received should be at a more competitive rate than what you could get on a short term loan or line of credit.