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5 Benefits of Accounts Receivable Financing

Accounts receivable financing has become a popular alternative to traditional business loans. It allows businesses to leverage their outstanding invoices for financing. You can use your business’s outstanding invoices to secure accounts receivable financing. The lender will loan you money based on the value of these invoices, and you can use this money to grow your business or simply cover its operational costs. What are the benefits of accounts receivable financing exactly?

5 Benefits of Accounts Receivable Financing

#1) Fast Approval Process

You can get approved for accounts receivable financing very quickly. It’s a faster financing solution than traditional business loans. While a traditional bank loan may take several months, accounts receivable financing often takes just a couple of weeks. If you need immediate cash for your business, you may want to choose accounts receivable financing.

#2) No Credit, No Problem

Accounts receivable financing is available for all businesses, regardless of their credit. You don’t need a stellar credit score to obtain accounts receivable financing. Most accounts receivable lenders, in fact, won’t even check your credit score or your business’s credit score. They are only concerned about your business’s outstanding invoices. As long as you provide the lender with a sufficient amount of outstanding invoices as collateral, you can obtain accounts receivable financing.

#3) Retain Equity

You’ll get to keep your business’s equity with accounts receivable financing. Equity, of course, represents ownership. To finance their business, many entrepreneurs sell an equity stake to an investor. Known as equity financing, it allows them to raise capital by selling a portion of their business to an investor. With accounts receivable financing, you won’t have to sell any of your business. You’ll retain equity in your business while simply leveraging your business’s outstanding invoices for financing.

#4) Few or No Restrictions

Most accounts receivable loans have few or no restrictions regarding their use. Maybe you want to upgrade your business’s equipment, or perhaps you want to expand into a new territory or market. While you should always read the fine print, most accounts receivable loans aren’t restrictive. After obtaining an accounts receivable loan, you can use it for just about any business-related purpose.

#5) Doesn’t Involve Selling Invoices

Accounts receivable financing is a type of secured loan. it doesn’t involve selling invoices. Instead, it only involves using your business’s outstanding invoices as collateral. Factoring, on the other hand, is different. With factoring, you can sell your business’s outstanding invoices to a financial institution. Accounts receivable financing allows you to keep these invoices on your business’s books.

This article was brought to you by Intrepid Private Capital Group – A Global Financial Services Company. For more information on startup and business funding, or to complete a funding application, please visit our website.

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Intrepid Private Capital Group • April 28, 2022

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