Managing the finances of a new firm can be difficult, especially when you have invoices with net 30, net 60 days. How are you supposed to keep up with pay roll or start a new job if you haven’t been paid for the last one? This is how the big companies stay big, they have the capital to bite the bullet and keep going perpetually. It does’t have to be this way. With accounts receivables financing (factoring), you can increase your cash flow and take on bigger and better jobs immediately!

financing

How Does AR Financing Work?

Factoring is a simple process. First, you sell your product or service to a customer, as you normally would, and are issued an invoice for payment by that firm. Needing cash immediately to maintain and grow your business, you sell that invoice to a third party, and receive cash immediately! Once your customer pays the third party, the rest of your money is returned (minus fees). After this, the cycle begins again!

What are the Benefits?
  • Cash, Immediately!
    • Cash flow is very important, especially to new or smaller companies. If your money is tied up in projects you’ve already completed, you are stagnant. More freedom, more profit!
  • Based on Customer’s Credit, Not Yours
    • It can be hard to get traditional financing from a bank or other source if your company is young and doesn’t have established credit. Accounts receivables financing takes your debtor’s credit and trustworthiness into account much more than that of your own company. What the bank can’t get done, we can!
  • Flexible Alternative to Traditional Financing
    • Unlike a bank or other source of financing, there is no long term contract or obligation involved. Some companies don’t even require you to finance every invoice from the same debtor, only the ones that you need.