Today Accountant

Receivable Financing

Unlike a traditional bank loan, Accounts Receivable financing is not based on the cash flow of a business. Our A/R financing program centers around the quality of your company’s Accounts Receivable. Our solutions allow for your company to benefit from its Accounts Receivable by allowing access to money upon invoicing a customer instead of waiting to receive payment from the customer.

Factoring Receivables

Unlike factoring, verification and notification are not an issue with A/R Financing, thus your customers will not know that you have a credit facility in place. A business credit line is established. Generally, the credit line will be somewhere in the neighborhood to the equivalent of two months of your companies sales. The credit line allows your business to draw from the line as needed. The draw is limited up to 90% of value of the combined accounts receivable outstanding.


However, AR financing usually requires that customer payments are sent to a lock box that is controlled by the lender. Remember, unlike factoring, your customer is not contacted for verification or notification and checks are written out to the seller. As the accounts receivable payments are received they are applied to the outstanding loan balance to reduce the loan amount that was previously drawn from the line.

Accounts Receivable Financing

Accounts Receivable Financing is a line of credit secured by a company's account receivables. Generally speaking, we establish a "formula based" line of credit based upon your eligible receivables. Eligible receivables are usually considered receivables within 91 days of invoice date. Normally, we will arrange an advance rate of up to 90% of the Eligible Receivables. It may be easier to think of AR financing as nothing more than a revolving line of credit.

At the end of each month, an interest rate is paid on the outstanding daily balance of the loan. Interest rates vary widely depending on the bank or finance company. The rates are usually tied to the “Wall Street Journal Prime” lending rate. Normally, rates run between "Prime" plus 3 to "Prime" plus 6.

Our typical clients include:

  • Companies that have been turned down for traditional bank financing.
  • Financial ratios that are not in-line for traditional line of credit.
  • Have bank loans not large enough to support growth.
  • Are currently with finance or factoring company.

If your company invoices other businesses for a product or service thus creating accounts receivable, we may be able to help you. Our services also include Purchase Order Financing and Invoice Financing.

 

Just because you have been turned down by another bank should not stop you from speaking to us....

Apply for Receivable Financing Today!