How Does Accounts Receivable Financing Work?

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In the simplest of terms, accounts receivable financing enables companies to leverage their outstanding invoices to a third-party partner, like Camel Financial. However, it’s a bit more in-depth than that, so let’s take a closer look at how accounts receivable financing works and what benefits it can provide for you.

What Exactly is Accounts Receivable Financing?

As mentioned above, accounts receivable financing has to do with your companies existing accounts and their invoices, both current and outstanding. It represents the money your customers owe you for goods you’ve sold them or services you’ve performed. Think of it as an extended line of credit: you’ve given your clients something on credit and they have a fixed amount of time to pay you back.

When an accounts receivable financing company comes into the picture, they use these outstanding credit lines/invoices to provide you financing and cash-in-hand to be used as you see fit. They’re now also the ones responsible for tracking down those outstanding or late invoices, giving you more time to focus on expanding your business and building a solid financial foundation.

How Do I Determine if Accounts Receivable Financing is Right for Me?

One of the easiest and most obvious ways to determine if accounts receivable financing is right for you is to take a look at your financial stability as a company. Are you having trouble paying bills or payroll at the end of each month? If so, accounts receivable financing can certainly provide you with the funding you need to meet your daily financial obligations, in addition to paying off debts and moving toward a stronger financial footing in the coming years.

At the end of the day, it’s up to you, but accounts receivable financing will:

  • Help you borrow against money that’s already been promised to your company by your clients.
  • Give you quick access and cash-in-hand when you need it most.
  • Only require your invoices as collateral, unlike other traditional lending companies that might ask for a piece of your business or offer high-interest loans that are difficult to pay back.

Contact us today for more about accounts receivable financing and more!

If you’re in need of quick cash to meet your business expenses, contact Camel Financial online today or call (949) 722-7717.

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