A/R funding is a kind of financing that provides a perfect solution for companies that require finances not available from mainstream lenders. Most companies do need additional cash flows with an aim of supporting growth, seasonal demands, and opportunities or solve short-term cash needs. Through accounts receivable financing, quick and flexible cash to run your business is assured.
It is because of the many beneficial reasons that A/R financing has been steadily gaining popularity. The advantages that are posed by this kind of funding are way too good to resist. This method improves the financial profile and credit rating of your company. The various benefits brought by accounts receivable are as follows:
Quicker cash flow. Adopting this mode to finance your business gives an immediate opportunity whereby you can change credit sales into liquid cash. Obtaining outstanding monetized receivables through commercial funding firms, you get into a position where you can obtain money whenever you are in an urgent need of it. Time that would have been wasted waiting for weeks for customers to make their payments is consequently saved.
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. Any type of business, large, medium or small can opt for A/R funding. Setting up the accounts receivable factoring lines takes just some few days. Unlike the conventional bank loans, you will not make payments or create a debt. Moreover, you are free to finance as much or as little as you wish.
Additional services offered. Most funding firms provide necessary help in managing your entire portfolio of accounts receivables. These comprise of invoice processing, reporting and posting. As a result, you gain a lot of time to focus on activities that are revenue-generating. In most situations, factoring firms help in determining credit rating of potential clients before you actually make sales to them.
The company checks on payment history of potential customers before signing them up. This helps to significantly cut down prospects of bad debts and start dealing with customers with reputable records. In the end, possibilities of getting into financial crunches like inability to pay taxes are done away with.
It is because of the many beneficial reasons that A/R financing has been steadily gaining popularity. The advantages that are posed by this kind of funding are way too good to resist. This method improves the financial profile and credit rating of your company. The various benefits brought by accounts receivable are as follows:
Quicker cash flow. Adopting this mode to finance your business gives an immediate opportunity whereby you can change credit sales into liquid cash. Obtaining outstanding monetized receivables through commercial funding firms, you get into a position where you can obtain money whenever you are in an urgent need of it. Time that would have been wasted waiting for weeks for customers to make their payments is consequently saved.
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. Any type of business, large, medium or small can opt for A/R funding. Setting up the accounts receivable factoring lines takes just some few days. Unlike the conventional bank loans, you will not make payments or create a debt. Moreover, you are free to finance as much or as little as you wish.
Additional services offered. Most funding firms provide necessary help in managing your entire portfolio of accounts receivables. These comprise of invoice processing, reporting and posting. As a result, you gain a lot of time to focus on activities that are revenue-generating. In most situations, factoring firms help in determining credit rating of potential clients before you actually make sales to them.
The company checks on payment history of potential customers before signing them up. This helps to significantly cut down prospects of bad debts and start dealing with customers with reputable records. In the end, possibilities of getting into financial crunches like inability to pay taxes are done away with.
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 Invoice Discounting he recommends you check out www.receivablefactoring.net.
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