Working capital is a vital component of running a business in the modern competitive marketplace. For your company to stay on top of the many expenses that come along with daily operations, you need to have access to cash at all times. What’s more, you need to be able to guarantee that you will have cash flow coming into your business down the line. When a client fails to pay for services you’ve provided, however, it can lead to some major setbacks for your brand. This is where accounts receivable financing solutions can help.
What Are AR Financing Services?
AR financing, which is also known as factoring, is a type of asset-based service available to business owners. It focuses on the unpaid invoices that business owners possess when customers don’t pay for completed work. The lender will purchase qualifying invoices from the business and provide an advance of a certain percentage of the invoice value. When the full debt is collected from the client, the lender then provides the business owner with the difference that is owed. The service is a very useful way to unlock revenue from unpaid customer invoices.
How You Benefit from Factoring Services
Accounts receivable financing services offer several benefits to business owners. For one, the service is quite different than other financing options. Unlike a loan, which requires the borrowed funds to be repaid within a set amount of time. AR financing is viewed as an advance. You are owed the money and are simply being given what you have been waiting for. Another key benefit is that the service is fast, flexible, and can be used whenever a business owner possesses invoices that will qualify.
What to Consider
Before you assume that AR financing is the best fit for your needs, there are a few points you should think over. For one, lenders that provide factoring services charge a fee for the advance. If you need every cent you’re owed to remain operational, then this may not be the best fit for you. What’s more, only certain invoices will qualify. Review the criteria put forth by the lender early and learn about what qualities the invoices must possess. Thinking over these points can offer more insight into how the service will benefit you.
Accounts receivable financing is a solution that can offer many key advantages to business owners. Contact WHW Capital today to rightsize your cash flow and build up capital for long-term success.