For many small businesses in Kenya, managing cash flow can be a daily struggle. Whether you run a hardware store in Mombasa, a small IT firm in Nairobi, or a food supply company in Eldoret, waiting for clients to settle their invoices can severely limit your ability to grow or cover everyday costs like rent, salaries, and inventory. But what if you could unlock cash tied up in those unpaid invoices? Enter receivables financing—your cash flow secret weapon.

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Receivables financing is a financial service that allows businesses to receive immediate funds from their unpaid invoices. Here, a financial institution or fintech firm advances you up to 90% of the invoice’s value. Once your client pays the invoice, you get the remaining balance, minus a small fee.

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Here are practical tips on how small businesses in Kenya can leverage receivables financing:

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1. Understand Your Cash Flow Gaps

Your business might experience cash flow gaps for a number of reasons. Whether it's seasonal fluctuations or customers buying on credit, these delays can choke your cash flow. It is essential to evaluate the reasons why. If your business frequently struggles with pending payments or slow-paying clients, receivables financing can offer the liquidity needed to keep operations running smoothly.

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2. Use Receivables Financing for Growth

Receivables financing isn’t just for covering immediate expenses—it can also help you grow. Say you’ve landed a large order from a client in Nairobi but lack the funds to purchase the supplies needed. Instead of turning down the deal, you can finance your invoices to get the cash upfront and fulfill the order. This can help you seize opportunities and grow your business without constantly worrying about cash flow shortages.

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3. Partner with Trusted Lenders

In Kenya, there are no shortages of invoice factoring companies. Make sure to compare terms, fees, and how quickly you can access the funds. Jia, for example, offers competitive rates that are fair, flexible, and fast. 

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4. Manage your Invoices 

Invoice factoring companies often value well-organized, clear, and accurate invoices. Jia can help digitize and automate your invoice system through our SaaS platform. Our management system can help you get control over your invoices and unlock funds quickly! 

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In today’s competitive business environment, maintaining healthy cash flow is critical. Receivables financing offers a practical solution to the common problem of delayed payments, allowing you to access cash and grow your business. Learn more about our receivables financing platform, Jia Advance, and find out how we can help you accelerate growth.