Accounts receivable financing is a popular funding option for businesses that have unpaid invoices. Learn more about this financing option and how it can help your business when you’re ready to grow.
How Accounts Receivable Financing Works
Your business sends out invoices to your customers. You sell those invoices to the lender. The lender advances you money on that invoice. The customer pays the lender when the invoice is due. The lender takes the advanced money from the invoice and a small fee, then refunds your business any remaining amount.
Benefits of Accounts Receivable Financing
Accounts receivable financing is not a debt. It doesn’t go on your credit report. The lender isn’t worried about your credit score, which means this financing option is viable for new businesses without a credit history. The lender is more concerned about your customer’s credit score. Your business builds a credit history with the lender.
This type of financing can help you get through seasonal cycles. You can still provide financing terms to your customers without hurting your business. Accounts receivable financing is a reliable source of capital. It’s a way of getting cash into your business without taking on debt.
Although accounts receivable financing can seem a little more expensive than a traditional loan, your business can get financing in a short time. It’s convenient and flexible when you need cash to pay expenses quickly. Your business doesn’t give up equity, and it can help you remain soluble when customers don’t pay as fast as you need them to.
Find Financing Options
If you don’t qualify for a loan, you may still qualify for accounts receivable financing. Contact Prime Wealth Development for information about accounts receivable financing and how your business can take advantage of this funding option to grow and expand your business.