Accounts Receivable Financing

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Accounts Receivable Financing :

Accounts Receivable Financing

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Every business whether big or small need cash flow for successful working of the organization. It is just like a machine which needs to be lubricated time and again to run smoothly. In case, the machine becomes dry, its normal functioning comes to a halt and becomes very difficult for the workers to work on it. Similarly, an organization needs additional cash flow for supporting the demands, expansion and business opportunities that otherwise is not available from the traditional lenders. This extra cash advance is known as Accounts Receivable Financing and it a very good solution for businesses that are looking for more funding. It has proved to be tremendously beneficial for organisations looking to restructure, hire more employees, fund payroll and much more.

How it works::

The companies that deal with Accounts Receivable Financing buy your invoices and make the money available to you within 24 hours. They keep into account your customer’s credit history, the industry you are dealing with and various other criteria before deciding the advance rate, though, it can range from 70%-85%. Back-office support is an additional advantage that you get here. You don’t need to wait for months to collect your payments from your customers as with accounts receivable financing , you always have some amount of extra money in your hands that you can use for your expanding your business. How it works:

Advantages::

It is a very valuable financial tool that has numerous key benefits. One can enjoy the constant short-term cash flow that proves to be of great help in times of need especially when you want to make it bigger in your industry. The various advantages that can be enjoyed by organisations are; This financing can be customised according to the company’s requirement to make the capital available when necessary. It is not shown as debt in the balance sheets of your company which is a true benefit. A company’s history or the owner’s own credit details have no role to play in it. In fact what matters is the customer’s credit details. The best part of accounts receivable financing is that there is no maximum limit of capital like in the case of traditional loans. It is very useful for new businesses that want to start up from initial point as the owner can get immediate cash flow in his hands. All the payment is made in advance so the businesses can track and manage capital hand in hand. Advantages:

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