Accounts receivable factoring
Accounts receivable factoring, also known as AR factoring, helps the business owners that need liquidity quickly or are unable to use the traditional lending sources to get immediate access to the cash that is tied up in their company’s accounts receivable. The accounts receivable factoring company, also known as a factor, will review your invoices, approve them (a process that usually happens in only 24... 48 hours) and then give you an upfront payment that can go up to 90% from the value that is written on the invoice. The accounts receivable factoring company will then wait until your customers pay their invoices, and then it will give you the remainder, keeping a small percentage as a service fee, which is generally in the 1%... 3% range, but can go as low as 0.75% for low-risk invoices.
Accounts receivable factoring offers a powerful, and yet little known alternative to business loans and credit lines. And while the traditional funding sources are quite hard to obtain these days, because your business credit history plays a very important part, with accounts receivable factoring your business credit score isn’t important at all, because only your customers’ credit history is taken into consideration. Companies that went through bankruptcy in the past or have poor credit are more than welcome, because accounts receivable factoring doesn’t take that into account.
No matter if you are running a small or a big company, accounts receivable factoring helps your company get access to the money that allows it to improve its cash flow and operate properly, even if your clients only pay their bills in 30, 60 and sometimes even 90 days. This means that regardless if your company is just starting up or is an established business, accounts receivable factoring can work for you either as a quick short-term funding solution or as a perpetual, low-cost funding strategy. We have financed many start-up companies, as well as established businesses that have big contracts with the government and other major corporations.
Getting financing through accounts receivable factoring is a simple, straightforward process: you send a copy of your invoice (or invoices) to the invoice factoring company, and then they run a quick check, making sure that your customers are creditworthy. If everything is OK, the factor will send you the upfront payment right away, paying you the remainder as soon as your customer pays the invoice.
Accounts receivable factoring helps companies get access to large amounts of cash that can go well beyond the traditional business loans or credit lines, without adding new debt to the balance sheet; this helps the entrepreneurs maximize their profit and business growth, while repairing their business credit and allowing them to have access to traditional funding sources as well.
If you have problems trying to meet the payroll, paying the rent, purchasing new equipment and goods or simply want to have access to a quick financing source, accounts receivable factoring is definitely the answer. Contact us to discover why over 100,000 business owners refer to us as being the accounts receivable factoring specialists.
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