Accounts Receivable Lending & Financing, Invoice Factoring

Accounts Receivable Lending & Financing, Invoice Factoring

Accutrac Capital 08-Oct-2010 0 Comments

Accounts Receivable Lending: Why Opt In for Invoice Factoring

Business dynamics have grown very complex due to greater competition in the market. This in turn has led to a sluggish cash and payment processing cycle. Most industries at some point will go through a period of a cash crunch which makes smooth operations of SMEs in Canada a bit tougher. This is where the need for accounts receivables lending comes in to the picture. The concept is pretty simple to understand. Experts term accounts receivables lending as invoice factoring.

Invoice factoring is the process of purchasing commercial accounts receivable (invoices) from a business at a discount. It works like this: the factoring company buys your invoices percentage of its face value and gets paid in full by your customers. The difference between the discounted rate and the face value is the factors profit or incentive for buying your invoices. The benefits of accounts receivables lending is available across sectors. Industries such as transportation, pharmaceuticals, automobiles, agriculture and more have all shown immense interest in getting contracted with an accounts receivable lending firm.

Working Capital: Without a slightest of doubt, we all would agree that working capital funding is the most important ingredient of any business. A company’s energy costs, payroll, and miscellaneous expenses are all dependent on the working capital available. If this aspect is not fulfilled, then it might seriously dent the operations of an organization. Today's financing sources for small business is becoming tighter and more restricted making invoice factoring an ever more viable option for business financing. It doesn't matter if it is to buy new equipment, raise immediate working capital or ease cash flow problems, factoring can often offer a practical alternative solution. Over the years, all industries including transportation industry factoring have filled the working capital bucket by hiring services of accounts receivables lending firms.

Sales Process Assistance: This strategy could be of assistance to you if you sell products or services to businesses, if your customers have good credit, and if you have current orders that you are ready to ship, invoice factoring might be of great benefit to you and your company. A decent corporate cash inflow also makes sure that an open end sales freedom is provided to the sales team. This in turns helps in better growth prospects for the organization.

Accutrac Capital Solutions is a leading accounts receivables lending company providing services to all sectors including trucking factoring. For details log onto: https://www.accutraccapital.com/

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