- KredX Editorial Team
- 16 Jun 21
- business

With daily COVID cases running near the 1-lakh mark, the government is forced to impose lockdowns and restrictions on gatherings and movement of supply chains. So, even with economic stimuli and tax provisions, the economic activity is slowing down. Policymakers are left with fewer contingency plans against another sharp economic downturn if it happens.
Risk is an unavoidable part of any business – whether a COVID-shaped global disaster is present or not. It comes in many forms, each with its unique way of leaving a devastating aftereffect. However, those doing business during a pandemic (and potential recession that may follow) need to find ways of mitigating risks actively. It is crucial not only for expansion but also for survival and financial stability during turbulent times.
Many businesses have turned towards financing their accounts receivables to have a stable cash flow during the pandemic and sustain amid fierce competition. Let’s examine how this alternative lending option can help businesses mitigate operational risks amid a pandemic.
A Brief Insight Into Financing Accounts Receivables
Essentially, accounts receivables financing refers to an arrangement between a business and a lender where the former obtains funds from the latter against approved invoices. During liquidity crunch, instant access to funds frozen in receivables stabilises cash flow and keeps daily activities running smoothly. Financing receivables can be broadly classified as follows:-
Sale Of Receivables
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Secured Loan
How Account Receivable Financing Helps Mitigate Business Risks
It is not without reason that account receivable financing has been gaining popularity in recent times. More and more companies are resorting to accounts receivables financing to meet their business requirements. Here’s how receivables financing can help mitigate business risks during a crisis.-
Quick Access To Cash During Liquidity Crunch
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Collateral Free Financing Is Beneficial For Small Businesses
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Overcome The Backlog And Redesign Using High-Value Loan
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Maintain Relations With Vendor