Accounts Receivables Financing and How it Helps Businesses

Accounts receivables financing (A/R financing), also known as invoice financing or ledgered line of credit provides great solutions for businesses in need of more funding that traditional lenders cannot readily avail. Most companies will often need additional cash flow to support growth, business opportunities, seasonal demands, or just take care of short-term cash needs. This is where accounts receivables financing chip in to provide to a business with the much-needed flexible, instant cash that will provide the business with an opportunity to grow, hire additional employees, meet market demands, restructure, fund payroll , or take advantage of economies of scale and supplier discounts, enabling better working capital management.

An ideal accounts receivables financing option allows you to have access to cash without having to give up any equity in your startup or existing company. Furthermore, it is not as restrictive and as expensive as equity financing. Typically, A/R financing increases or increases depending on current business needs and size, allowing you to get the necessary administrative support to help you manage your accounts receivables without adding staff, and gaining you access to cash whenever you need it (based on eligible accounts receivables). Moreover, the professional and competent small business factoring companies like CJM Financial will do the follow up to make sure that your customers pay according to the invoice terms.

The invoicing finance company will advance a percentage of the eligible invoice to you (normally within 24 hours) once you submit a copy of the invoice, including the supporting documentation. Once they receive the remaining amount from your customer, you will get the remaining amount, less administrative fees. This financing process will help clear your schedule and allow you to make good use of your valuable time – concentrate on core business, perhaps, to generate more business and service existing customers. Better cash flow management and reduced interest expense can greatly improve the performance of your business.