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Accounts Receivable Finance: How Can A Business Use Accounts Receivable As A Funding Source

Published By Faith Stewart at March 31st, 2022

Accounts Receivable Finance: How Can A Business Use Accounts Receivable As A Funding Source

Accounts receivable finance options can offer solutions to a number of business funding needs. They can help cover cash gaps or as working capital. In fact, they are a great way to get money for your business without worrying about credit score.

An Accounts Receivable Finance Option Can Be A Superior Solution for Cash Gaps

accounts receivable finance Credit Suite2 - Accounts Receivable Finance: How Can A Business Use Accounts Receivable As A Funding SourceMany businesses find themselves cash strapped when their own customers are slow paying. Account receivable financing is a good solution. This is secured financing that uses your accounts receivable as security, or collateral.

Any business that carries receivables that turn over regularly can benefit. Old receivables aren’t worth as much. Think about it. If you have been waiting for payment for several months, you have a collection problem. Lenders aren’t as likely to lend against receivables that aren’t paid regularly.

Yet, if you regularly collect within 30 – 90 days, you only need cash to cover that gap. Accounts receivable financing from Credit Suite may be the perfect option.

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An Accounts Receivables Finance Option Can Work Even With Bad Credit

Typically, monthly rates run between 1.25% and 5%. Loan amounts can go as high as $20,000,000. To qualify, you will not need financials or good credit.

You will need a time in business of at least 12 months. The lender will review existing receivables.  Consequently, they will also consider the companies that your receivables are with. Hopefully, the companies who owe you have a good history of paying their debts. If so, your approval chances will increase substantially.

Why Credit Doesn’t Matter

Lenders are not looking for good credit from your business. Instead, they need to see that those who owe you will pay. Of course, that is because they get their money when your customer pays the invoice. Accounts receivable finance options typically offer up to 80% of the total of receivables. When your customer pays, you get the balance, usually 20%, less a fee.

Borrowers can be approved with a personal credit score as low as 500.  That’s even with recent derogatory items or major collections on the credit report.

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Fast Access to Cash

You can get initial approval in 3 weeks or less. Once approval is financial, you may have funds in as little as 24 hours.

You can operate your business as if you get payment much sooner than your customers actually pay. Better yet, you can do so even while offering net terms to your clients.  Of course, that helps you grow and run your business more successfully

Required Documentation

Required documentations include:

  • Your application
  • 3 Months of business bank statements
  • Your business debt schedule
  • And your accounts receivable report

Benefits of Accounts Receivable Finance Options

Your business gets money without having to rack up expensive debts.   Furthermore, the process is easy and fast. With more cash on hand, your business will pay its own bills faster. In turn, your business credit score may improve.

Both you and your customers benefit. You collect the majority amount of outstanding invoices. In addition, you can offer your clients far more favorable payment terms directly from your business. It’s a win for everyone!

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Start the Accounts Receivable Financing Process with Credit Suite

There is a 4-step process that is easy to complete. First, fill out the  form for a one on one consultation with a representative. Then, submit your application. After that, there will be a soft pull on your credit report. Then, there is an easy account receivables review for approval. You can prequalify in as little as 24 hours. What are you waiting for? Get yours free Business Finance Assessment today!

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