Have you ever heard about account receivable financing? If not, you might like to know about this extremely helpful form of alternative lending for raising needed working capital. It can be quicker than applying for a loan. It has a host of other benefits as well.

A Synopsis of Accounts Receivable Financing 

Accounts receivable financing, also known as invoice factoring, is a unique form of financing that you can use to obtain the cash your business may need. As long as you have sales – even future sales – you may qualify for an immediate infusion of cash for your business needs! Here is the way it happens:

• You get an immediate sum of cash, the amount of which is based on your sales invoices.
• You receive a percentage. Generally close to 100%, of the actual value of your outstanding sales.
• You farm out the collection of unpaid invoices directly to the financing agent. Enabling you to be free to tend to your day-to-day business activities. 
• Depending upon your priorities and the magnitude of your sales, you can sell anywhere from a few percent to 100% of your accounts receivable.

Using Accounts Receivable Financing During Seasonal Periods

During seasonal lows, slow periods, or during a pandemic, your business may be entering a declining revenue period. Your customers may be slow to make purchases or place orders. Additionally, your employees maybe a little less energetic than usual. If a big blizzard, tropical storm, or something equally annoying hits, your cash flow may temporarily slow up. It’s times like these that are tailor-made for accounts receivable financing.

Prepare For Potential Cash-Flow Doldrums

Your cash flow may have been temporarily stretched thin when you decided to obtain accounts receivable financing. Therefore, once your cash influx is received, take the steps to keep your business running in the black.  

This may be a good time to motivate your employees. Keep them happy and contribute to the bottom line. Also, consider how you can attract new customers or enter into a new market niche. 

Your Financial Agent

When searching for accounts receivable financing, look for a company that offers alternate forms of financing. Demand that their lending programs are completely transparent. You’ll always want to know the exact costs of any financing and never be charged any fees not spelled out at the onset. It’s best to work with a national leader in the alternative lending field.