Have you ever heard about account receivable financing? If not, you may like what you learn about this extremely savvy form of financing that is applicable to many business models, especially those that deal with the issuance of invoices on a regular basis.
What is Accounts Receivable Financing?
Accounts receivable financing, which is also known as invoice factoring, is a special form of alternative financing used by many businesses that issue invoices to clients and customers. In a nutshell, the business sells its accounts receivable to a separate outside firm and receives an immediate payment of cash in return.
The beauty of accounts receivable financing is that an immediate win-win situation is created. The business obtains an immediate inflow of needed capital. The finance agent, who buys the unpaid invoices at a small fraction of their total value, stands to profit by collecting the full invoice amount.
Keep in mind that account receivable financing is not the sale as a loan. In fact, it is a sale – the sale of your unpaid invoices.
Benefits of Accounts Receivable Financing
Many businesses get into a cash flow pinch from time to time. By utilizing accounts receivable financing, they may accrue several important benefits:
- Cash flow is immediately increased
- No need for the business to take out a loan
- No long-term contracts are involved
- The cash may be utilized any way the business sees fit
- The business is freed up from the job of collecting unpaid invoices
High Point Financing
If you are intrigued about accounts receivable financing, then give High Point Financing a call. We are leaders in alternative financing for businesses of all types. Accounts receivable are one of our most popular programs. See if our team can help your business move up to a higher level.