Your business has more assets in its possession than you realize. When you experience a disruption to your cash flow, it can be useful to know which assets can be used to secure working capital. If your primary problem is stemming from clients who have not fulfilled invoices for services you’ve provided, then you should look into the alternative financing solution of factoring. Accounts receivable financing services gives you the opportunity to turn unpaid invoices into working capital in no time. Learn more and see how you can take advantage of AR financing solutions.

How Factoring Works

AR financing is a simple service to understand. A lender that specializes in account receivables financing solutions will take a look at the invoices in your possession and determine if any qualify for this service. Those that do will be purchased from you by the lender and you will receive part of the total value of the invoice. Once the debt is repaid by your client, the lender will take a fee for the service and give you the difference that you are owed. When you need fast access to cash, AR financing can be a lifesaver.

Understanding the Advantages

As the details suggest, a service like factoring can provide you with a number of substantial benefits. For one, selling unpaid invoices to an interested lender offers you a unique chance to stimulate cash flow when you are in a bind. The longer you wait for payment on invoices, the more likely it is you are going to cause disruptions within your own supply chain. You can avoid this and see the funds you’ve been waiting on by selling your invoices to a lender and using the advance you are given as a way of covering your operating expenses.

Assessing Your Invoices

The invoices in your possession are the key component in a service like AR financing. Unfortunately, not all invoices are going to qualify for this solution. To eliminate risks, lenders usually only accept account receivables related to larger entities like government agencies and corporations with household names. Another point to think over is the fee that this service can cost. If the expense is too significant, you may want to think about simply waiting to receive the payment from your client instead of taking the financial hit from the service fee.

When it comes to using your company’s assets to your advantage, factoring is a fantastic option available to you. Learn about whether or not your invoices qualify to see how you can begin with this solution.