The Key to Success is What a Business Does With the Money!

Oct. 26, 2012 - PRLog -- Clearly the upcoming presidential election will have consequences for banks and businesses, but the conventional wisdom is supporting a cyclical upturn no matter who wins. The primary reason being that there will be more clarity for the future. Will we have Obamacare or not, more or less regulations, etc? Either way, a lot of people just want it to be over!

The key to being successful on RMP Capital Corp’s Accounts Receivable Funding Program is what the business does with the money. In other words, since Accounts Receivable Funding essentially puts a business on a cash basis, no longer waiting for customers to pay their invoices, the difference is how those funds are employed.

The following is an actual case study (wholesale business using our program):

Company Background:

- Wholesaler of specialty interior build-ing products selling to contractors and doing some fabrication.
- $3,000,000 annual sales
- Days Sales Outstanding: 47—50
- Market — Existing facilities and staff can support 30% sales growth
- Gross profit - 24.6%, net profit - (1.2%)
- Material costs: 44.4% of sales
- Misses early-pay/bulk vendor discounts
- Max’d out $250K line of credit

Company Goals:

- Have cash flow to support 30% growth
- Take advantage of 4.5% early-pay plus 7% bulk vendor discounts
- Get “debt-free” of $250K working capital line

90 Day Results:

- Vendor discounts re-negotiated for discounts
- Bid activity increased, growth imminent
- Profitability: Net profit forecast up to 4.2%
- Now “debt-free” of working capital line

Future Profit & Loss Projections:

Sales:

3,000,000 (before)
3,900,000 (@ 30%)

COGS:

2,262,000 (before)
2,750,000 (@30%)

GP:

738,000 (before)
1,150,000 (@ 30%)

Net Profit:

(36,000) or (1.2%) (before)
164,000 or 4.2 % (@ 30%)

This is just another example of how a business that had opportunities to employ a strategy of reinvesting cash on a daily basis could, not only offset the higher funding fees, but increase net profit!

RMP Capital Corp, headquartered on Long Island, NY, provides a hybrid, turnkey Accounts Receivable Funding and Purchase Order Financing Program that banks can refer to their customers and prospects at no risk or cost! It is an alternative to traditional bank financing specifically designed to increase cash flow and fund growth companies. It’s a great way for community bank’s to grow deposits and generate recurring fee income revenue!

Visit us online to learn more: http://www.RMPCapital.com