Use Receivable Factoring Finance to Create Working Capital
Selling A/R to Fund Your Business
Summary of Selling Invoices to an Invoice Factoring Company
Selling accounts receivable (A/R) or receivable factoring finance helps businesses struggling with cash flow from waiting months for customer payments. AR factoring injects working capital into companies from the sales of unpaid receivable invoices plus Total A/R Management.
Selling Receivables for Cash Flow
Small business financing is a complex field for small businesses struggling to obtain working capital. 89% of companies in the US have less than 20 employees, and only approximately 25% receive traditional funding (Finances Online). Small businesses, startups, and growing companies struggle with cash flow funding due to offering extended credit terms with little to zero cash reserves. Accounts receivable (AR) financing is a simple solution that provides fast, debt-free working capital.
AR factoring financing is the process of selling your unpaid customer invoices to Bankers Factoring, a factoring company. If your company is in a period of rapid growth and needs quick working capital, submit an online funding application to begin the financing process. We provide cash funding within 3 to 5 days of your initial application, and then daily funding is ongoing.
Factoring financing is excellent for the not-yet bankable business as a fast-funding solution. Accounts receivable factoring is based on the creditworthiness of your customer. Large commercial customers typically have a strong credit history. Startup AR Financing helps financially distressed, and unbankable businesses develop consistent cash flow.
Selling AR invoices is a great payroll financing solution that offers additional cash flow for business expenses. Cash flow struggles are daily for companies financing extended credit terms without factoring financing. In this article, we cover:
- Why do companies sell accounts receivable?
- Receivable Factoring Financing
- How to sell receivables?
- AR Invoice Financing: The Sale of Accounts Receivable
Why do companies sell accounts receivable?
Selling AR invoices or receivable financing helps businesses struggling with cash flow while waiting months for customer payments. Quick cash flow is the main benefit of invoice factoring financing. Selling receivables helps companies bridge the gap between weekly payables, bi-weekly payroll funding, and capital financing.
- Fast working capital and quick funding
- Not yet bankable or unable to secure bank financing
- Cash advances 80 to 93% of unpaid AR invoices
- No balance sheet debt; debt-free financing solution
- Use Seller’s A/R to Buy a Company
- Cash advances occur the same day as factoring financing approval
Learn more in our previous article, “The Pros and Cons of Factoring A/R.”
Receivable Factoring Financing
Companies improve their cash flow efficiency by selling receivables, called AR factoring financing. Factoring financing transactions are conducted as an asset sale and purchase rather than a loan or line of credit. Bankers Factoring buys the financial rights to your unpaid invoices, but the clients remain responsible for operations and service. AR factoring helps companies bypass outstanding customer payments’ 30, 60, or 90-day wait.
Extending NET 30, NET 60, or even NET 90-day terms put your business in a tight cash position without adequate funding. Offering credit terms provides the revenue to operate. Still, small businesses need cash flow to pay daily, weekly, and monthly bills. Most importantly, payroll funding is critical for employee retention and operational performance.
Large commercial customers or government entities require extended credit terms to become a vendor. The main reason customers or account debtors need credit payment terms is to protect their cash flow. Cash flow is king. AR factoring financing helps businesses struggling to overcome cash flow gaps. Contact Bankers Factoring today and develop a cash flow plan for your business.
Learn more in our previous article, “How to Offer Credit Terms Through AR Financing.”
How to sell receivables?
Selling receivables or Selling Your Accounts is a straightforward process that only requires completing an online funding application. If your business has invoices from unpaid customer invoices, you can qualify for AR factoring financing. Bankers Factoring provides Same Day A/R Factoring Financing, cash advancing funds the same day as factoring approval. Selling receivables is a fast financing process that takes 3 to 5 days from applying.
- Complete an online funding application
- Receive factoring financing approval within five days
- Bankers Factoring cash advances 80-93% of A/R value the same day as approval
- Bankers Factoring rebates the remaining AR balance less our small factoring fee
Selling receivables helps startups and small businesses overcome banking obstacles. Small businesses have a high failure rate due to poor financial management and cash flow struggles. AR invoice financing provides consistent cash flow funding for the unbankable.
A/R Invoice Financing: The Sale of Accounts Receivable
Invoice factoring financing is a standard solution that many financial professionals are aware of, but not as many business owners. Selling accounts receivable helps entrepreneurs, startups, and small business fund operations and unlock sales growth potential. AR factoring injects working capital into businesses from the sales of unpaid receivable invoices.
Invoice factoring financing helps businesses obtain flexible working capital in a short turnaround. The sale of accounts receivable benefits unbankable companies with solid commercial customers. Building a strong business credit profile takes time and a consistent history of demonstrating fiscal responsibility. AR invoice factoring removes the burden of cash flow shortages.