Accounts Receivables Loans
Considering Accounts Receivables Loans
When it's difficult to get regular loans through banks and other sources, it could be difficult for Elon College NC small businesses to get through times with low cash flow. If your business relies on seasonal business or you need cash right now for expenses or expansion, accounts receivables loans could make the difference in your business' success.
What Is Accounts Receivables Loans?
Accounts receivables loans are a way to get fast cash for your business through your receivable accounts. Sometimes called factoring, accounts receivable loans are a trade of your outstanding invoices and accounts receivables for up-front cash. The amount of the cash advance offered will be a percentage of the face value of your outstanding invoices. In most cases, the percentage offered will depend on the age of the account - the fresher it is, the more it will be worth.
Benefits of Accounts Receivables Loans
There are a number of important benefits to accounts receivables loans in addition to ready access to cash when you need it. They include:
Reduce Expense of Collections
When you choose accounts receivables loans, you're outsourcing your collections and accounts receivable management to the lending company. That saves you the expense chasing your customers for payment and frees you up to pursue more productive activities.
Free Up Your Capital
Accounts receivables loans allow you to free up capital that's tied up in inventory and outstanding bills so you can use it to advance your business.
Keep in mind that the industry for accounts receivables loans is not as regulated as the [statetitle] banking industry. Take the time to research and investigate the many Elon College NC companies that offer business financing and know who you're working with. Despite the possible drawbacks, accounts receivables financing can help your company thrive and grow when you have no other financing options available.