While it may seem like there are all kinds of financial solutions to your cash flow problems, when you start looking closely at each one of them, there always seems to be some point of objection or some reason why it wouldn’t work for your business. On the other hand, accounts receivable financing is a very easily arranged financial transaction which can be very beneficial to your business, and which can be set up very quickly to provide you with immediate cash. In some cases, you might have cash in your hands within 24 hours of applying for accounts receivable financing.
Benefits of Accounts Receivable Financing
There are a great number of benefits that accrue to a company that chooses to apply for accounts receivable financing. First of all, you can have cash in your hands in as little as a day or two, and that is tons better than waiting weeks on end for a traditional bank to approve your loan. In fact, even after applying to a bank, you’d most likely be turned down in today’s tight economic climate.
With accounts receivable financing, your business credit history doesn’t really come into play at all, because approval is based more on how promptly your customers pay their invoices. Another benefit of accounts receivable financing is that it does not work like a loan, so you never have any money to repay a lender. Once you sell invoices to a factoring company, it becomes their responsibility to collect the amounts of those invoices, while you receive cash in your hands as payment for those invoices.
There is no monthly remittance necessary to any company, so you’re not taking on any additional debt. Also, since you don’t have the responsibility of collecting on those invoices, you can free up employees who would otherwise have been engaged in collecting invoice amounts. Those employees can be reassigned in your company to accomplish more business-specific tasks.
Interested in the Benefits of Accounts Receivable Financing?
If you’ve been considering accounts receivable financing, we might be able to help you. Contact us at GP Solutions so we can discuss how this arrangement can be beneficial to your small business, and how easy it is to set up.