Knowing the Incredible Advantages of Accounts Receivable Financing

Need a quick loan to meet your working capital requirements? Does your business have a lot of outstanding invoices? In any of these situations, you should consider accounts receivable financing. For the uninitiated, accounts receivable financing is a form of loan, where pending invoices are sold to a factoring company for getting immediate funds. Invoice financing, as it is also known, has many advantages, as listed below.

  • You can get a quick loan. The whole process of getting funds with accounts receivable financing is extremely smooth, and you can expect to receive the money in just a few working days. This is a big advantage over traditional bank loans, which can take weeks for an approval.
  • You are selling what is yours. Invoice financing is all about selling pending invoices. This is not like a general loan that will impact the balance sheet. At the same time, you don’t have to pay any interest and do not require collateral either.

  • You can convert your invoices into cash. If your invoices are due after a while, you can convert them into cash with accounts receivable financing. This is a great option for small and emerging businesses that need funds on a regular basis.
  • You can pay your creditors on time. You can maintain your reputation in the industry if you pay the creditors on the due date. Since you can get a quick loan with invoice financing, your creditors don’t have to wait.
  • Creditworthiness of your business is not judged. If you are a small company with reliable debtors, you can still get a loan with accounts receivable financing. For a regular loan, the bank will be interested in your creditworthiness, but for invoice financing, only your credits matter.

  • Your share is never compromised. This form of financing doesn’t put any pressure on equity. If your business doesn’t get a regular loan owing to other factors, accounts receivable financing is probably the most viable option.
  • You get more than just a loan. Factoring companies offer a lot of additional services. They collect bills on your behalf, offer reporting on creditors and may help in managing your receivables in a more professional manner. Also, these companies are great at getting bills from debtors without being aggressive.

Check online now to find more on accounts receivable financing, and don’t forget to select a reliable and known factoring company with a credible history.