Accounts receivable financing involves compensating your business for its invoices, and these invoices serve as collateral for the alternative lender doing the financing. As a business person, you can sell your accounts receivable at a discount, or you could choose to borrow funds against them and pay interest, as you make draws on the available funds. The funds which would be available to you are always based on your open accounts receivable.

Purpose of Accounts Receivable Financing 

The most common reason for businesses to fail in modern times is the shortage of cash flow or the continuing intermittent nature of cash flow. There is no over-exaggerating the importance of cash flow because it not only meets day-to-day business expenses, but it supplies funding for business growth. For many businesses, however, cash flow is rarely smooth and predictable, and that makes paying for business expenses very difficult.

The whole idea of Accounts Receivable financing is to make cash flow much more predictable and smooth, and to allow a business to comfortably meet its day-to-day expenses, while also possibly planning for business growth. When you can have predictable income coming in at expected times of the month, budgeting for expenses is much easier, and there are far fewer difficulties with managing the company budget.

The whole point of Accounts Receivable financing is to manage any expense emergencies that pop up, as well as to provide the primary solution to working capital needs any company has. By converting your receivables into cash, any company is much better able to meet the day-to-day demands of business and to plan for future growth.

Would Your Business Benefit by Accounts Receivable Financing? 

If you typically generate a lot of invoices each month, and many of these are for substantial sums, you may want to consider accounts receivable financing as a means of improving your cash flow. Contact us at Nations Capital Financing to see how we can help set this up for you.