Accounts Receivable Factoring

Accounts receivable factoring has become a staple financing option among industries including:

And more. With immediate access to working capital, business owners nationwide are using AR factoring to accomplish tasks including:

Without having to wait for slow customer payments (or for medical and dental practices, slow healthcare payments).

accounts receivable factoring

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What is Accounts Receivable Factoring?

Accounts receivable factoring is a way for businesses to leverage their receivables in exchange for cash.

Customers will not be notified if you use AR financing, making this the ideal choice over purchase order financing for business owners who wish to protect their reputation.

The capital borrowed typically takes the form of an AR line of credit, which business owners can borrow from at will.

For companies with solid credit who are capable of paying their invoices on time, this may be the ideal option for businesses that seek additional funding as quickly as possible.

These funding vehicles will allow businesses to maximize their cash flow and improve their position by selling off their accounts receivable.

This way they can generate the capital that allows them to convert their idle invoices into liquid funds.

asking what accounts receivable factoring is

How Does Factoring Accounts Receivable Work?

First, a business owner essentially sells their accounts receivables to a lender. These receivables will act as collateral, in case of foreclosure.

Borrowers then receive a revolving a line of credit in exchange. This credit line offers a fast and flexible source of capital that they can then draw from as needed.

The maximum amount of capital you can draw from is determined largely by the amount offered by your receivables leveraged.

With an accounts receivable line of credit, you don’t have to use what you don’t take out. Instead, draw only the amount you need, and the rest will still be available to use when you need it.

This AR factoring a financing option with greater flexibility and a lower cost of capital compared to standard small business loans.

The “revolving” nature of AR factoring allows you to add capital back into your credit line, where it gets added back into your total maximum. This capital can then be withdrawn once again if needed.

Do You Qualify for AR Factoring?

All you need to get approved for accounts receivable factoring is:

No minimum FICO or additional collateral (besides your accounts receivables) are needed to get approved.

AR Factoring Interest Rates and Terms

Accounts receivable lines of credit follow True APR, which is a generally lower and more cost effective means of interest compared to factor rates, which are common among small business loans.

Here are the terms that come with AR financing through NBC:

Accounts Receivable Factoring Advantages

Accounts Receivable Factoring for Construction

Contractors are using AR financing to turn their receivables into a source of funds to:

AR Lines of Credit for Wholesale Distributors

AR lines of credit are a great way for wholesale distributors to:

Transportation Accounts Receivable Factoring Uses

AR Financing for Medical Practice Use

Accounts Receivable Line of Credit for Service Businesses Uses

AR Factoring Uses for Tech Companies

Using Automotive Accounts Receivable Factoring

>Using AR Financing for Manufacturing

AR Factoring: A Use for Any Industry

Immediate access to cash whenever you need it is an extremely helpful tool for any business that is constantly having to make unexpected purchases, and solve unexpected challenges. Accounts receivable factoring gives you this opportunity.

Cash flow challenges prevent many businesses from managing their day-to-day expenditures or to fulfill business goals such as expansion.

Besides accounts receivable factoring, National Business Capital can also recommend additional financial tools that will allow small businesses to fulfill monetary obligations, and to sell products and services.

For example, NBC can also assist these firms to establish a business line of credit that provides quick access to additional capital when needed.

Through AR factoring, we have assisted companies all over the country to improve their existing business, but also to position themselves well for the future. Contact us and let us go to work to find your business the business financing it requires to thrive.

How to Apply for Factoring Accounts Receivables

All you need to do is fill out this 60-second application to get started right away. Or, you can give us a call at (877) 482-3008 to ask any questions, and see if AR financing is the best option for you.

After applying, you will be contacted by a Business Financing Advisor (BFA) to discuss your options moving forward.

You will then remain in contact with your BFA throughout the funding process to ensure you get the capital you need as quickly and easily as possible.

Start factoring your accounts receivables in as little as 48 hours after applying!

How Much Do You Need?