If you’re having trouble keeping your cash flow flowing, you’re hardly alone. Times are tough right now. Sales are down in many sectors, and many customers may be having trouble paying their bills. This can create a dangerous situation if you’re struggling to keep the lights on – particularly for SMBs who may lack the resources or credit for a bank loan.
Fortunately, there’s another alternative, one with minimal credit requirements: accounts receivable financing. With accounts receivable financing, also sometimes called factoring, you can turn your unpaid outstanding invoices into cash – and fast!
How Accounts Receivable Financing Works
The premise behind AR financing is extremely simple: you take valid outstanding invoices and sell them to a factoring company. You will take a little loss on the transaction, but you’ll still usually get between 70-90% of the face value on the invoices. Then the AR financing company takes over responsibility for collecting on the invoice.
It’s that easy. When you first sign up, you will need to undergo a credit check and company background check, but the requirements are minimal. If you’re a legitimate business and you have genuine outstanding invoices, you probably qualify.
The process is quick, as well. In most cases, you can have cash in hand within just a few days.
This can help companies in a jam in numerous situations. For example:
- You have customers who won’t pay their bills. Utilizing AR financing is usually going to be cheaper than sending them to collections or initiating legal action yourself.
- You overstretched on a job estimate. Sometimes things go wrong on a contracted job, and you have to pay extra costs out of your liquid funds. That leaves you out-of-pocket until the invoices return. If you’re looking at 60-90 days for payment, that might be too long.
- A disaster hit, and you need cash immediately. If the roof of your building got ripped apart by a storm, you don’t have time to go through the full process of haggling over bank loans. Accounts receivable financing is often your fastest option for getting cash to pay for repairs.
Plus, you don’t have to worry about arbitrary credit limits. With AR financing, the only limit is your own AR balance.
Get Accounts Receivable Financing Today
Camel Financial have been pioneers in accounts receivable financing since the 1980s, and we’ve helped hundreds of businesses just like your own. If you’ve got outstanding invoices and you need liquid funds, contact us.