Mar
2023

Accounts Receivable Funding – Factoring and Financing Tools

Accounts receivable funding is a financing vehicle solution for all types of businesses that extend credit to their personal customers for goods and services. This type of funding has the only model that gives cash based on a company sales report. Accounts receivable funding is also the one financing model that grows in direct line to your company sales. This type of financing is available to businesses which cannot get a regular loan from banking institutions because of credit worthiness. Accounts receivable funding is not a loan and because of this, a businesses debt load remains untouched. In simple terms, this type of funding is the swap of your businesses accounts receivables invoice for some cash.

Account receivable funding sources are not subject to the same bank institutions regulations and that is because the account receivable funding company is buying the companies invoice outright and not giving them a loan for it. Most business owners who have never before used this type of financing are really surprised at how fair and business smart this can be for their business. The reason a lot of business owners love this type of financing is because unlike banks that pry deeply for a companies debt to equity ratio, an account receivable funding company concentrates on the companies customers to see if the invoice purchase is worth it. With this type of funding, daily and weekly delays plus financing negotiations are wiped out,letting the company owner run his business instead of wasting time trying to procure loans. This type of a business model is hardly taught in business college today which in turn has had the majority of US companies not knowing that their is a great tool they can use to help run their business. Accounts receivable funding can be a useful and wonderful tool for the business that has huge dips and swings in cash flow. Once this type of service is used by the business owner, they free up many created problems that cash flow can bring up. Having a steady and projected cash flow account makes it easier to know what to expect in a business environment without hoping that the next invoice gets paid quickly.

Accounts receivable funding is used worldwide and is a great financing vehicle for any type of company that usually extend credit to their own customers. Since this type of funding is not a loan, your company carries less debt on your balance sheet and at the end of the day your debt capacity remains untouched. Globally realized as a useful financing source, accounts receivable funding is used in every industry by businesses that usually need immediate cash flow relief for growing a business and even for survival. If you are interested in finding an accounts receivable funding source just hit the highlighted link.