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What exactly is accounts receivable financing and factoring and how can it help a business?

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Aug 25, 2012 by Jim Peters

Category: Factoring

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Advisor: Kimmy Burgess, Personal Loans
Mar 13, 2013

For accounts receivable financing, business works with a financial institution to set up a revolving line of credit but business still owns their credits and it usually cost less than factoring.

In Factoring, company purchases the receivables and become the new owner. In this, company become the owner so it become flexible and can sell receivables according to their needs.

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Advisor: Pacific Business Capital Corporation, Factoring
Sep 7, 2012

Accounts receivable financing is a type of asset financing arrangement where the company uses the receivables as a collateral in the financing arrangement. The accounts receivable may be the most valuable asset of the company. No additional debt is being created by financing or factoring the accounts receivable and you do not need to give up the ownership of your company to obtain he working capital. But it can help your company immensely, it helps in expanding into new markets and working with a larger and demanding customers, receiving professional assistance with evaluation of the abilty of a new customer to pay. And last but not the least, the company receives cash within 2 hours from its most valuable asset.