Have you ever wondered whether or not A/R financing is for you? In order to decide whether or not AR financing is the right funding option for your business, it’s important to understand what it is.
Let’s say that your company has just made a sale to XYZ Company totaling $100,000 for widgets. In order to entice XYZ Company to buy from you, you dropped the price and offered them a credit term of 60 days to pay the note.
Of course, you have additional orders to fill, but filling XYZ’s order has depleted your bank account so you can’t buy more raw materials. You could take out a loan, but in doing so you will miss the delivery date on at least 6 customer orders because it takes approximately 6 weeks to finalize the loan. Or, you can factor company XYZ’s invoice for $80,000 now, meaning within 48 hours, which will allow you to fill your current orders. You will receive the addition $20,000, minus the AR financing fee, when the invoice is paid.
A/R financing allows your business to continue its operations without going into debt, without waiting for loan approval and without missing those large orders which can launch your business to the next level.
If you are ready for one of the best factoring companies, to turn your invoices into fast cash, give Universal Funding a call today at 1-800-405-6035 or submit a rate form for a free consult on your financing options.