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If you need immediate access to capital but can’t wait for customers to pay their invoices, accounts receivable financing might be a great option to help you get quick liquidity.
As opposed to other types of traditional loans, which are typically based on the overall creditworthiness of your business, this type of financing is based on the value of your company’s accounts receivable, i.e. the invoices due to be paid by customers.
In this case, the creditworthiness of the customers who owe you money is more important than your financial status because you are selling their outstanding invoices as assets.
To help you get a better idea of this type of financing, National Business Capital has prepared this comprehensive guide on the main advantages of accounts receivable financing, how it works, and how it differs from traditional loans.