As the old saying goes, sometimes you have to spend money to make money. So it follows that financing is often an essential component in business growth. There are, of course, many options available to finance the growth of your business. Among those options is one that many may overlook but none should discount without careful consideration.
More working capital opens up more opportunities for you and your business, so determining exactly the right method to acquire that capital is essential. To know if accounts receivable financing is the right path for you and your business, the best place to start is with the basics.
Accounts receivable financing (also known as AR financing or as an accounts receivable loan) is an ideal option for businesses looking to quickly obtain capital. This type of financing is so named because the accounts receivable of the business taking out the loan are used as collateral in the financing process.
This arrangement allows the business seeking financing to effectively use the compensation that is still due to them, while the lender takes on the risk and acts as an account debtor. It can take a good amount of time to collect on an invoice, so many businesses are drawn to accounts receivable financing as it allows them to collect most of their earnings due swiftly and also saves them from handling invoices and payments.
The basics aside, accounts receivable financing boasts a few perks as well:
If accounts receivable financing sounds like an ideal opportunity for your new business, contact Advance Funds Network at 888-310-3110 for more information and a free quote.
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