The Benefits of Accounts Receivable Factoring

Raise Business Capital with Accounts Receivable Financing

When it comes to raising capital for your business, the fastest way to do so is by factoring invoices. Accounts receivable factoring refers to the process of selling open invoices for an advance equaling 70-90% of the value of factored invoices. Companies who need capital can review their open invoices and offer them for sale to a third party factoring company. It’s that easy.

Companies not only use this process to raise capital, but to maintain cash flow, and to manage their past due receivables as well. They can sell past due invoices for cash without having to hassle their customers for money and potentially jeopardizing future sales. Receivables factoring gets money in your hands quickly without taking on new debt because it access the assets that are sitting in unpaid invoices.  You may have payment terms of net 10, net 30, or even net 45 which is a benefit for your customers, but it can hamper cash flow.  Most of our clients use this financing solution for the short-term, to keep cash flow robust during a growth push.

How Does Accounts Receivable Factoring Work

You simply perform the services for your customers and invoice them like you normally would.  Then you send a copy of that invoice to your factoring company (Universal Funding.) Say you invoiced Company XYZ for $10,000 payable in 30 days, your factor would deposit 80% of the value of that invoice immediately.  $8,000 would be available in an instant and the remaining balance would be made available to you as soon as your customer makes the payment in full.

About Universal Funding

Universal Funding is a nationwide invoice factoring solutions leader, supporting growth-focused businesses with scalable factoring solutions. With its invoice factoring, payroll funding, and purchase order financing services, Universal Funding provides clients with the working capital needed to grow and support their businesses without taking on new debt. Ranked as one of the nation’s top invoice factoring companies, Universal Funding provides cash flow financing for businesses all across the United States.

Whether your business is thriving and you can’t keep up, or you are waiting on clients to pay, Universal Funding can help your growing company. Call us at 800.405.6035 or complete our rate form today to learn more about invoice factoring and how it can improve your company’s cash flow.

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