Getting Financial Help with Accounts Receivable Factoring

In a small business, cash is king.  All small businesses need cash on hand to maintain operations and continue to grow.  You have bills that need to be paid and money needed to fulfill purchase orders.  Sometimes, you may not have much cash on hand but you do have an excessive amount of money in your company’s receivables that simply have not been paid yet.  What can you do? Well, one option that your company has is called accounts receivable factoring. 

Account receivable factoring is done when a company asks an accounts receivable factoring company to purchase their current receivables in order to get immediate cash on hand.  The receivable’s company will research and investigate to determine whether or not the purchase is acceptable.  If the offer is accepted, the receivable company will pay the client company a large portion of the payments as well as future payments on the receivables while also keeping a portion of the funds as a payment for their services.  The main large payment is typically around 90% of the value of the current invoices.  Should a particular customer default on a payment, the receivable company will sell the invoice out to another company.

Account receivable factoring can be beneficial to a company for many reasons.  One main reason that factoring can be beneficial for a company is that it gives a company cash funds immediately to use as they need.  In the event of an unexpected incident or opportunity, quick cash can be the difference between a company succeeding and failing.  Cash on hand can make all the difference in the world when it comes to paying off creditors. 

Many small businesses need financing and account receivable factoring is just one of many different options that are out there.  If you are still unsure, contact America Corporate Turnaround to determine if account receivable factoring is the right one for you.