Accounts Receivable Financing
Finance Your Receivables to Ensure Improved Cash Flow
If you are looking for ways to handle a higher business volume more consistently, then it is time to stabilize your cash flow with the right tools. Precisely understanding how different types of credit can extend your financial reach in other ways is therefore crucially important.
Accounts receivable financing is a type of funding that allows your company to draw on using outstanding invoices. So, you’re using the amount owed to you by clients – for services rendered or goods delivered – as collateral. Financing your accounts receivable will allow your company to receive payment on these outstanding invoices before the actual due date by committing some, or all, of your receivables to . This practice can be extremely useful when a timing discrepancy exists between your business’s cash inflow and outflow.
“For example, you have just sold a bunch of goods or services to a regular customer, but with credit terms. In this way, you incur the full costs of production, stock, staff, and other overhead before being able to cash in. One client like this is unlikely to upset the healthy financial balance of your enterprise. But what if your business starts growing and you get five customers asking for the same credit line? It would be best if you didn’t have to refuse them, for obvious reasons. Financing your accounts receivable with allows you to turn these outstanding invoices into active cash flow, immediately available to your company.”
Financing Accounts Receivable is Easy
After contacting about financing your company’s accounts receivable, our associates will first review your customers’ payment histories alongside their current outstanding debts. After all, it’s their credit that matters the most to us since your advance is given against the money they owe. When a total sum is determined and dispersed, will take over collecting payments for your convenience as well. After deduction of the advance and our fees, the remainder of the funds will go straight into your account.
Benefits of Financing Your Company’s Receivables
- You can access your cash when you need it the most
- You don’t need to worry about collecting payments
- All outgoing expenses can be met within your timeframe due to increased cash flow gains
- New orders coming in won’t have you strapped for cash any longer
- You can build in an estimate of the financing cost into your business growth plans
- Reduce the costs and risks involved with other types of financing
- Use this type of financing as new accounts come in
- This option is much more flexible than traditional Asset-based lending (ABL)
- guarantees non-disclosure to your clients. For them, it’ll be business as usual
- You’re not adding long term loans to your business operation
- Properly structuring Accounts Receivable Financing can keep it off your company’s balance sheet. Therefore, it has no impact on your outstanding loans or any future credit lines and similar funding requirements.
Please contact one of our dedicated financial advisors today for more information!