What is Accounts Receivable Financing
Small businesses are encouraged to grow but are often not given the same financing opportunities as larger corporations. For example, when it comes to business loans. It is much easier for a large established business entity to get financing. One option that a business can utilize to help raise capital is by considering accounts receivable financing.
This type of financing is where a company uses their accounts receivables to generate the cash they are in current need of. It is often called factoring. The company will sell their accounts receivable to a financing company that specializes in buying accounts receivable. The sale of the accounts will be at a discounted amount of what is owed on the invoice.
Solution for Cash Flow Issues
A lot of new businesses face cash flow issues when first getting started. It can be difficult to get financing to help with this. But accounts receivable financing is easier to obtain and works well for starter businesses who have funds coming in but can’t wait for the normal terms of the accounts receivable. Factoring can be done as needed until the company becomes strong enough that it no longer needs help with cash flow.
Small companies often have staff that they need to pay who are not going to wait for the long term of the accounts receivables to flow in. Companies can use factoring financing to cover their payroll. Some businesses need to buy ongoing supplies to keep production going. They cannot shut down production lines while they are waiting for funds to come in from the accounts receivable. A better solution is to use the accounts receivable for funding. Factoring financing is a useful resource for the new business to get the funds they need to keep their business going until it builds up a cash flow that can carry it.
Five Companies Offering Accounts Receivable Financing
Becoming a business owner means quickly learning what resources are available to the business when it is in need of financing. One of these resources is institutions that offer accounts receivable financing also known as factoring.
Commercial Capital LLC: This is a company that offers factoring for not only the United States but other countries as well. Commercial Capital has been offering this type of financing solution for over ten years and has assisted a variety of different companies with their short-term financial needs. They don’t use gimmicks to sell their services.
Universal Funding Corporation: As a funding corporation, this company has been offering their services since 1995. They state that they offer competitive rates and that they welcome new startup companies. They are flexible in the type of business they will offer their services to. Their mandate is to offer the highest funding rate within the shortest period of time possible striving to make this within a twenty-four hour period.
Riviera Finance: This factoring company is on par with their competitors when it comes to competitive rates and a speedy turnaround time. They do not implement any minimums. They have been in business since 1969 and they will also accept delinquent receivables.
American Receivables: One of the drawing features of this company is the fact they have been business for many years. They are competitive and are well known for their top quality customer support.
Paragon Financial Group: For businesses that need factoring for a large volume of accounts receivables, Paragon Financial Group may be a good choice. Their monthly factoring ranges from $25,000 to $3 million a month. Their focus is on those businesses that are dealing with tax issues.
These are just five of several well-established and highly recognized accounts receivables funding financial establishments.