Accounts Receivable Financing
Businesses need quick and reliable financing options when cash flow is tight and loan or credit requests through the usual banking channels seem to take too long. Traditional financial institutions typically rely on inflexible categories such as those reflected on the balance sheet. This can certainly be limiting at times when liquidity is a critical issue. Let us help you extend your borrowing capacity by offering our accounts receivable financing option.
Basics of accounts receivable financing
This method is actually a type of asset based financing where you sell your receivables at a discount for immediate cash. You can think of outstanding invoices as tied up capital. It is money that won’t be on-hand from one to three months, depending on the payment terms you’ve established with your customers. By selling your receivables at a discount (factoring), you can infuse your business with immediately usable cash. Since you are selling an asset, not borrowing against it, accounts receivable financing is based on your customers credit worthiness instead of yours. One of the other criteria involved in factoring receivables are the payment terms of those receivables. If you sell your products to businesses with good credit that pay in 30, 60 or even 90 days, we can provide you with immediate liquidity.
Accounts receivable financing benefits
Besides giving you a way to free up capital, this can be a means to acquire quick financing. Procedures can actually be resolved fast, in as little as 24 hours for established clients, because it doesn’t require presenting tax documents or a business plan. If your business currently happens to be in a delicate position, accounts receivable financing may just be the quick solution that could pull it out and make it profitable again.
In addition to being fast, Accounts Receivable Financing can provide unlimited funding. The amount of capital that you have access to by factoring your receivables is limited only by the size of your receivables. As your company grows, your ability to access capital grows in direct proportion. So, if your business is growing faster than your finances can support or is struggling with a cash flow situation, accounts receivable financing may just be the solution that could provide the liquidity needed to meet short term obligations and provide the capital necessary to maximize profits.
This route doesn’t always have to be taken as a last-ditch effort or desperate measure. We understand that sometimes small enterprises simply miss taking advantage of opportunities because they don’t have the monetary resources. Perhaps extra capital is just currently inaccessible due to not being able to meet traditional bank financing qualifications. Accounts receivable financing can be a stepping stone to a more regular credit line.
Another advantage is that this option also enables you to outsource collections management. This aspect of a business can sometimes be a drain on resources. Through accounts receivable financing, we can take this burden off your shoulders and assume the risks. This way you’ll have more time to concentrate on core processes and it can also provide you with the means to pursue expansion objectives.