Accounts Receivable Financing
What is Accounts Receivable Financing?
Accounts receivable financing is a method where your company's unpaid invoices serve as collateral for immediate cash. It typically provides 80% of the invoice value immediately, with the factoring company handling customer payments. Once paid in full, you receive the remaining balance, less a factoring fee. This fee, typically starting at 3% of the invoice total, is based on how quickly your customer pays. Apart from invoices, you can use other receivables like purchase orders and inventory for funding. AR financing, secured by your company's assets or debts, often has more flexible requirements, making it easier to qualify for than traditional business loans, even for startups.
Minimum requirements for accounts receivable financing
To qualify for accounts receivable financing, you generally need a functioning business with creditworthy customers and unpaid invoices that can serve as collateral.
Time in Business
6 month minimum
What Documents Are Needed To Apply?
Voided Business Check
Profit and Loss Statements
Business Tax Return
Personal Tax Return
Business Debt Schedule
Get loan options from multiple lenders
Talk to a business loans specialist at:
Apply for a term loan in as little as 10 minutes.
1. Complete your application
Answer a few question about your business and your personal loan preferences so we can match you to the lender offering the best rates and terms for your needs.
2. Speak to our underwriter
Meet your personal underwriter here to ensure we have all the documents and information we need to ensure we get you the best options for your business in the shortest amount of time.
3. Review your loan options
Check out the loan options available for your business, choose the one that makes the most sense for you at this time
4. Receive funds
Once you decide what works best, we'll have the capital in your account in less than 24 hours
Benefits of accounts receivable financing
Improved Cash Flow: Accounts receivable financing allows businesses to access immediate cash based on their unpaid invoices, eliminating the waiting period associated with customer payments and improving liquidity.
Reduced Collection Hassles: With this form of financing, the factoring company handles debt collection, relieving businesses of the time-consuming and sometimes difficult process of chasing down customer payments.
Easier Qualification: Compared to traditional financing methods, accounts receivable financing often has more flexible eligibility criteria. It can be particularly beneficial for newer businesses or those with less-than-perfect credit, as it's primarily based on the quality of the receivables rather than the creditworthiness of the business.
Why Use Lendtek for accounts receivable financing?
$100M Funded to Small Businesses Throughout the US
75+ Lenders in our marketplace
5000+ Loans Funded over 9 years