Stop Taking on Debt: Use Accounts Receivable Financing / Factoring Instead
As a small to medium sized B2B Company, there is a strong probability that you have used your own personal funds, credit cards, or traditional loans as a working capital source.
We are here to tell you to stop putting your personal credit on the line!
What if we told you there was a way to supply the working capital your business needed without affecting your personal assets?
There is, and that is exactly what ACCOUNTS RECEIVABLE FINANCING / FACTORING provides.
Many companies are not familiar with this form of working capital solution, even though it has been around FOREVER. Accounts Receivable Financing / Factoring provides a cash flow solution for your business by purchasing your Accounts Receivable invoices; eliminating the need to wait on terms of NET 30, 60, or 90 days for customer payment.
Now that we have briefly explained Accounts Receivable Financing / Factoring; let’s discuss the benefits of it over traditional lending and credit cards.
Traditional Lending v. Accounts Receivable Financing / Factoring
When it comes to traditional lending for a small to medium size business, in order to qualify, a traditional lender will be looking at the credit worthiness and collateral of the business & individual. Accounts Receivable Financing / Factoring review the credit worthiness of your customers (those who have outstanding invoices to your company) versus the individual. A traditional lender is less likely to take on the risk of a business that has little to no equity, but an AR Financing / Factor does not see this as a challenge.
Covenants often appear to be an obstacle when negotiating a loan agreement with a traditional lender. Accounts Receivable Financing / Factoring have limited financial covenants. Allowing businesses to focus on sales growth and not worry about complicated financial concerns, that they would otherwise have with a traditional lender.
Waiting up to a month or longer for approval by a traditional lender is not practical. Businesses need to cover payroll and other expenses immediately. At Seacoast Business Funding we have quick access to decision makers. We can approve and underwrite deals within a week or less.
Credit Cards v. Accounts Receivable Financing / Factoring
Credit cards have many similarities with traditional lending. First and foremost they are based on a business owner’s personal credit history. Versus Accounts Receivable Financing / Factoring which is evaluating your customer’s credit worthiness.
When it comes to credit cards, fees and high interest adds up quickly resulting in increased debt. The fees associated with Accounts Receivable Financing / Factoring are less then credit cards. Additionally, with Accounts Receivable Financing / Factoring your business is able to cover payroll which cannot be done with a credit card.
Additionally, with credit cards it is the business owner’s responsibility to manage and pay the cards monthly. Once the outstanding invoice is paid by your customer, the Accounts Receivable Financer / Factor wires the remainder minus their fee to the client; and eliminating the worry of having to make monthly payments.
After reviewing the benefits of Accounts Receivable Financing / Factoring over credit cards and traditional lending; now is the time to take advantage of a working capital solution from Seacoast Business Funding. Our Accounts Receivable Financing / Factoring solutions provide quick access to decision makers, lower costs, limited covenants, and an experienced team who understands your business needs.