Why You Should Choose Account Receivables Financing

Do you own a small company? Have you ever considered turning to accounts receivable funding as a way to streamline cash flows and guarantee reliable credit? If the answer is no, it could be the right time to change that. This handy guide will teach you all that you need to know about accounts receivable funding as a way to access capital quickly.

First things first; accounts receivable funding is known by many different names. The two most common are the one used here and ‘account receivables financing.’ They both refer to the same process and can be used interchangeably.

In fact, so much of corporate financing is confusing for businesses only because the terms are bewildering. The concepts right at the heart of most financing options are very simple. If explained in terms relevant to everyday options, they become a lot less mysterious and unapproachable. The same rules apply to Account Receivables Financing.

Reasons to Choose ARF Credit

Anybody who has owned a business will know how hard it is to sustain the amount of capital needed to keep a company operating smoothly. Unfortunately, being popular with customers or having a great sales record isn’t always the same as being financially viable.

However, this is a safe way to make sure that sales turn into profit quickly. This can make all the difference for small businesses and companies in the midst of growth and expansion ventures.

Essentially, it just means that a company does not have to wait for its customers to submit and process payments before it can access money from goods sold. This is made possible because a factoring agent offers to pay for invoices, on behalf of customers, so that the buyer can have more time to process the payment and the supplier can access the money quickly.

Understanding ARF Credit Terms

Here is a simple scenario to make things clear. Business A is a catering company that sells culinary ingredients, in bulk, to Business B. To get its hands on the cash from the sale of these goods more quickly, it agrees to let a factoring agent pay off the invoice sum instead.

In return, the factoring agent or firm takes a small percentage (it pays most of the original sum). This leaves Business A with the cash and Business B with plenty of time to receive the money for the invoice. When it does, it then pays the sum directly (in full) to the agent.

This arrangement can be very beneficial for all parties involved, as long as the vendor and the customer have a good working relationship. This is very important, because if Business B does not pay what it owes within a specified amount of time, Business A may be liable for the lost payment. The situation may be different if Business B is considered insolvent.

How to Take the Next Step

If this sounds like the right option for your business, get in touch with the experts at Capital Funding Solutions today. We come highly recommended by companies in Florida, Texas, New York, Georgia, Michigan, Virginia, and a host other locations across the country.

Accounts Receivable Funding & Account Receivables Financing in Florida, Texas, New York, Georgia, Michigan, Virginia…