Acquiring Accounts Receivable financing is a great way to manage your business without having to wait for business customers to pay their invoices. Loan programs are available to allow you to open a revolving credit line based on eligible receivables, or you can have receivables bought by a Factoring Facility. Either way, you can get your money quicker and put it back into your business, pay suppliers, fund payroll, or whatever needs you have at that time.
Here’s how factoring can help:
Frequently, a commercial bank cannot provide all the loan funds a growing company needs. A balance sheet is not liquid enough, or it can’t clear off the bank debt every 6 or 12 months. A factor can provide funds to clear off bank loans periodically or make additional bank credit possible by guaranteeing accounts or replacing accounts receivables with cash.
One of the biggest advantages of factoring is that businesses get immediate cash (from 70 -80% of the face value of the invoices) within 24-48 hours, which means you can accelerate your cash flow by speeding up payment of the receivables. You will have an immediate source of funds for operating expenses and future growth.