Accounts
Receivable Loans
Accounts
Receivable Loans: What Are The Options?
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Accounts receivable loans are monies owed by customers
to any business, and they are equivalent to the value of goods or services
bought from the business but as yet not paid for.
A key factor in considering business liquidity is its
ability to meet current obligations. At any one time it may be assumed
that there is a shortfall in what has been supplied and what has actually
been paid for! So if you need immediate capital you could sell your
receivables to a Factor at a small discount.
So accounts receivable loans (also known as Invoice Factoring)
is a handy means of getting quick working capital by selling the invoice
(accounts receivable) for goods or service that has already been supplied.
Despite the advantages
of accounts receivable loans, many businesses do not use this financing
tool either because of lack of awareness or have misconceptions of how
it really works.
Reasons to raise capital from accounts receivable loans:
* Take advantage of vendor discounts as they exist
* Extend credit to customers
* Buy equipment or inventory when needed suddenly
* Meet sudden tax and VAT demands
* A good source of working capital
* Relief from burden of non paying and slow paying customers
* Increase the numbers in the order book
* Flexible funding program which always increases when you increase
sales