Benefits Of Accounts Receivable Financing
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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. Financing your business through this mode provides an immediate opportunity of changing the credit sales into cash flow. By obtaining outstanding receivables that are monetized through commercial funding firm, you enter into a position whereby you can get money any time you need it badly. This saves time that would otherwise have been spent waiting for several weeks for a client to make his payments.
More focus in put on the business. Acquiring an easy working capital saves your resources and consequently giving you comfort. You now get into a comfortable position where you can redirect all your energies on different business activities, like sales and marketing, capable of providing much profit. That time that one would have spent collecting payments from defaulting clients is now devoted to bolstering your business.
More user friendly. A/R financing can be applied to any kind of firm, large, medium and small. Setting up lines on accounts receivable factoring takes only a couple of days. Unlike conventional bank loans, making payments or creating a debt will not be required. In addition, one is free to finance as little or as more as he or she 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. Financing your business through this mode provides an immediate opportunity of changing the credit sales into cash flow. By obtaining outstanding receivables that are monetized through commercial funding firm, you enter into a position whereby you can get money any time you need it badly. This saves time that would otherwise have been spent waiting for several weeks for a client to make his payments.
More focus in put on the business. Acquiring an easy working capital saves your resources and consequently giving you comfort. You now get into a comfortable position where you can redirect all your energies on different business activities, like sales and marketing, capable of providing much profit. That time that one would have spent collecting payments from defaulting clients is now devoted to bolstering your business.
More user friendly. A/R financing can be applied to any kind of firm, large, medium and small. Setting up lines on accounts receivable factoring takes only a couple of days. Unlike conventional bank loans, making payments or creating a debt will not be required. In addition, one is free to finance as little or as more as he or she 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 Account Receivables Factoring he recommends you check out www.receivablefactoring.net.
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