How to use accounts receivable financing to help my business

This is a popular method used instead of using bank loans or getting loan from money lenders. In this method usually companies don’t incur the debts which will affect their balance sheets. It is simply selling your invoices to the invoice factoring company who will pay you the portion of the invoice amount once you send the invoice to them after delivering the products. With the invoice received they will follow up with your clients to get the money from them. Once they received the full amount from the clients they will transfer the balance amount to your account. They will normally charge up to 5% of the invoice amount.

Benefits of using invoice factoring

For any business to survive it is essential to ensure it having steady flow of the funds for the hassle free operations.  To have steady flow one should have to speed up the accounts receivables but with the payments terms dotted with every customer it is tough for business to get the money from them before the due date. In this scenario, they can get the portion of the invoice amount by selling the unpaid invoices to the account factoring or invoice factoring companies.  Some of the major advantages are that you will have flow of money to run the operations smoothly. Second point is that you won’t incur any debt against your name so that your credit score will not go for a toss. Actually your credit score will improve as you will settle the vendors in time with the advance amount you’re receiving from the invoice factoring companies. You can go to the link to know more about the account factoring advantages and benefits companies have by opting for that facility.

You also will have dedicated manager working for you. You can contact that person for your reports and other enquiries. Besides that you will have your unique login where you can check the actual status of the payment pending from the client and other reports regarding the transaction. Once they receive the complete payment from the client end, they will either wire it to your account or deposit directly. Unlike bank loans which can takes days to get approved, invoice factoring usually approved in a day or two. You don’t need to provide any collateral. Main advantage is that they don’t check your credit history , they will the credit history of your client.