Different Types of Accounts Receivable Financing That Can Help Your Company

Business owners need to find alternative methods of funding every so often when they find themselves in a slow period. When a company does business with other companies and waits for payment to arrive later, this can sometimes create a blockage in the cash flow. Waiting for payment on accounts receivable can be out of the question when times get tough. Fortunately, there are a few different methods of financing that allow businesses to use their outstanding invoices to obtain funding. Learning about these different methods can help your organization.

Learn About Factoring

A popular method of accounts receivable financing is that of factoring. With this practice, a business owner takes their outstanding invoices to a factoring company, and they receive a sum of money upfront or in a few days. The company that provides this service then attempts to collect the debt from the other party. Once the invoice is satisfied, the business owner receives the difference minus factoring fees, if there is anything left.

Think About Selective Receivables

Another form of accounts receivable financing is selective receivables finance. This form of funding allows a business to choose which invoices they would like to sell. The business owner can also select when they wish to use this kind of service. When people use this kind of funding, it also helps them stay away from extra debt.

Consider Loans that Are Based on Assets

Perhaps, you prefer to use more traditional methods of accounts receivable financing for your business. If you’ve had success with asset-based financing in the past, then maybe this method will work best for you. For example, if you prefer to take out a business line of credit, then you might want to use some of your invoices as assets to secure this kind of financial product. If you do obtain a line of credit, then this will work similarly to a credit card where you used what you need from the limit and pay it back to free it up again. When you want a form of financing that you can use again later when you need it, then asset-based products might be what you need.

Taking the time to explore different kinds of financing can help your business get past hard times and realize new opportunities. There are many types of products out there, so it pays to put the time in to research what option is best for you.

Accounts receivable financing from Cross Commercial Capital may be just what your business needs to grow into the future. If your company has customers or clients who typically take more than 90 days to pay their invoices, this type of financing may be an excellent option for you.