What is accounts receivable financing?

If you own a business, it’s likely that people owe you money. In fact, it’s estimated that America’s small businesses have more than $800 billion in total unpaid invoices. Ouch. Those are a lot of zeros on a lot of ledgers.

The good news is that your unpaid invoices don’t have to be a black hole for your finances. With accounts receivable financing (also referred to as factoring), you can actually use your outstanding debt as an advantage. This happens as you sell your purchase orders or accounts receivable to a third party, allowing you to get access to cash.

Accounts receivable financing can be really helpful for the times when you need capital in a hurry. It enables you to borrow up to 80% of your accounts receivable, with low interest rates. As a bonus, this option saves you the time you would’ve spent trying to collect on the outstanding debt yourself.

It’s worth noting that with accounts receivable financing, your credit rating won’t be as scrutinized by lenders. Instead, the factoring company will analyze the credit of the company that owes you money, as it’s the crucial element that determines how likely they are to get paid. In fact, they might not even look at your credit in the process.

Our team of experts is happy to help you decide if accounts receivable financing is a good match for your business needs. And when you’re ready to take action, our lighting-fast application will put you in touch with more than 75 lenders.