How A Company’s Accounts Receivables Can Function As One Of The Most Viable Lending Options

A company that sells items on credit to other organizations can quickly experience a cash crunch if invoices are not paid promptly. From utility expenses to payroll, making sure money is available for expenses can be stressful and cause a business owner to seek out a variety of lending options to keep their company afloat. One of the best options is to borrow against any outstanding cash receivables, as it is more affordable than traditional loans and a payout can occur in as little as a few days. Here are the benefits and why more companies are choosing this route to make ends meet.

Affordable Fees

A loan from a bank can come with an exponential interest rate that can lead to high payments and wasted money. Borrowing against any outstanding invoices is more affordable, as most companies charge as little as 4 percent of the invoice amount, and pay the other 96 percent out as cash on the spot. They also have no loan origination fees, which are common with most commercial bank products.

Credit History

Accounts receivable financing is not dependent upon the credit of the owner or the organization. This means even companies who have had a rough financial past can still get access to the money needed as quickly as possible. Don’t let poor credit history prevent a business owner from getting the money needed when an invoice lender will be able to provide quick access to cash without worrying about credit scores.

Reduce Overall Risk

Maintaining an abundance of accounts receivables can come with significant risk. While most consumers will pay their bill on-time, some may not and cause a company to assume the risk associated with the bad debt. A company that lends money on invoices will obtain the risk and take over the job of collections, which can save time and money by reducing the need for a collections department in-house.

Make sure a company has the cash need to operate by getting an invoice based loan today. To learn more check out Business Factors, and see why they are one of the top accounts receivable lenders in the industry. A business owner has nothing to lose, and only the ability to become more financially liquid to gain.