Answer Cash Flow Questions with Accounts Receivable Financing

When they need help with cash flow, small businesses today have many possibilities worth considering. If your business requires financial assistance to cover expenses, you will first need to discern which options make the most sense for you. This could include accounts receivable financing.

Accounts Receivable Financing: Is it Right for Your Business?

Accounts receivable financing might be an ideal choice for your company. If you run the type of business with customers that are other businesses, this may well be the case. Other companies might not settle their accounts quickly after using your services or products. This means that insufficient cash flow is likely to be an occasional issue. However, your company can make use of your accounts receivable to produce the cash necessary for smooth operations.

Understanding the Basics

What exactly does this financing method entail? It is not unlike a conventional loan, in the sense that a lender provides a business with funds and charges a fee based on a percentage of the loan itself. The difference is that with accounts receivable financing, funds are granted based on the unpaid invoices of the business. A company receives funds that amount to a reduced value of the invoices involved. In general, newer invoices are more desirable to lenders than older invoices, since they are more likely to be paid in a timely manner.

Other Terms

This kind of financing may be referred to be a variety of names. These terms include invoice financing, receivables financing, A/R financing, and an accounts receivable loan.

Finding the Solution for Your Business

The best way to find a suitable funding option for your business is to consult a professional. Contact Smart Capital Lending Group for more information on accounts receivable financing, as well as other alternative lending possibilities. We can help you obtain the financing you need when your current cash flow is not covering your expenses.


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