4. April 2012 06:19
Accounts receivable financing is a simple concept. You start by providing a product or service to your customer. Then you bill them for what you provided. The service has been provided, but they haven't paid you yet. An outstanding invoice like this is a perfect candidate for accounts receivable financing. Rather than having to wait for the client to eventually pay you, you may be able to obtain cash from the invoice more quickly by working with a lender like Crestmark.
Why It Works For New, Big Clients
There are many applications where accounts receivable can shine, but it can be particularly valuable when your business experiences a sudden surge of growth, such as a new client. When you provide the first delivery of goods or services, it is often difficult to come up with the funding to handle the second and third under your current business conditions. Using accounts receivable financing allows you to bridge the gap between the funds your business has currently and what you expect to need for future orders.
A Non-Conventional Funding Alternative
Accounts receivable financing is a good opportunity for new businesses because it often has different requirements for approval when compared with bank products such as a traditional term loan. In this case, the main concern is how creditworthy your client is, not your business. For this reason, a lot of new firms use this to help them expand early on as they receive their first major orders.
Crestmark offers accounts receivable financing and other financial tools that can help when traditional bank loans don't meet your needs. Contact one of our lending experts today to learn about how we might be able to assist you with your business capital requirements.