A/R financing is also referred to as invoice financing. It offers a great solution for business that may be in need of more funding that may be unavailable from traditional lenders. Most firms do require extra cash flow in order to support the seasonal demands, business opportunities, growth or solve a short-term cash requirement. Through accounts receivable financing, your business is provided with flexible and immediate cash.
Given the many benefits provided by A/R financing, this option has gained a very steady popularity over the past years. The benefits posed by this funding are very attractive that it will be unwise to resist this measure. This measure boosts up the credit rating as well as the financial profile of your company. Other advantages that are obtained through receivables funding constitute of:
Quicker cash flow. This mode of financing provides you with immediate opportunity of converting credit sales into immediate cash flow for the business. Through receiving outstanding receivables monetized by commercial funding company, you get into a position where you can obtain money whenever you are badly in need of it. This save you the time you would spend waiting for weeks and months for your client to pay you your dues.
Focus on the business. Getting a hustle-free working capital relieves up your resources consequently giving you peace of mind. This enables you to turn your energies on other business activities that are more profitable like selling and marketing. The time that would be invested in collecting payments from unsympathetic clients becomes devoted to cementing your business.
More user friendly. This kind of financing is unbiased of whichever type of business, small, medium or small. Setting up the lines on receivable factoring will only take a few days. Unlike the mainstream bank loans, this funding does not require one to make payment or create a debt. To add on, a person is free to finance in accordance to his wishes.
Additional services offered. Majority of the financing firms offer to help in the management of your whole accounts receivables portfolio, which comprise of reporting, invoice processing and posting. Consequently, you get more time to focus on revenue-generating activities. In most cases, the factoring firm aids you in determining the credit rating of a potential client before you make actual sales to them.
What the firm actually does is to check the payment history of potential clients prior to formally signing them up. Through this, you significantly reduce prospect of bad debt as you begin getting good clients with reliable track records. Chances of financial crises like bankruptcy or inability to pay taxes are eliminated.
Given the many benefits provided by A/R financing, this option has gained a very steady popularity over the past years. The benefits posed by this funding are very attractive that it will be unwise to resist this measure. This measure boosts up the credit rating as well as the financial profile of your company. Other advantages that are obtained through receivables funding constitute of:
Quicker cash flow. This mode of financing provides you with immediate opportunity of converting credit sales into immediate cash flow for the business. Through receiving outstanding receivables monetized by commercial funding company, you get into a position where you can obtain money whenever you are badly in need of it. This save you the time you would spend waiting for weeks and months for your client to pay you your dues.
Focus on the business. Getting a hustle-free working capital relieves up your resources consequently giving you peace of mind. This enables you to turn your energies on other business activities that are more profitable like selling and marketing. The time that would be invested in collecting payments from unsympathetic clients becomes devoted to cementing your business.
More user friendly. This kind of financing is unbiased of whichever type of business, small, medium or small. Setting up the lines on receivable factoring will only take a few days. Unlike the mainstream bank loans, this funding does not require one to make payment or create a debt. To add on, a person is free to finance in accordance to his wishes.
Additional services offered. Majority of the financing firms offer to help in the management of your whole accounts receivables portfolio, which comprise of reporting, invoice processing and posting. Consequently, you get more time to focus on revenue-generating activities. In most cases, the factoring firm aids you in determining the credit rating of a potential client before you make actual sales to them.
What the firm actually does is to check the payment history of potential clients prior to formally signing them up. Through this, you significantly reduce prospect of bad debt as you begin getting good clients with reliable track records. Chances of financial crises like bankruptcy or inability to pay taxes are eliminated.
About the Author:
Connor G. Schiffman has 27 years of experience in commercial lending including factoring, asset based lending, and banking. Connor helps readers manuver through all the account receivable options providing practical and useful knowledge to better understand all your lending options. If you want to learn more about Receivables Loan he recommends you check out www.receivablefactoring.net.
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