Do you own your own business? Would you like to grow it or do you need extra funds to cover your expenses? There are many financing options out there for you to choose from, and the first one you may consider is a traditional bank loan. But, there are some disadvantages that come from these for small businesses. For example, if you do not have good credit, you may not get approved. In addition, you will probably need to put up some collateral. The process can take a while, and you will also be enduring a debt that may be adding to any other ones you have. There is an alternative to this, and it is called AR funding. This process is also known as factoring, and it is a superb way for a small business to get the financing they need to grow or to get out of a tight spot.
With this method, you will sell your invoices to a factor. This company will first have to verify them, and then buy them. Once they are paid by the customer, it will be time for you to get your funds, less a fee of course. When you make the decision to utilize AR funding, you will first complete an application. This involves you speaking to a company over the phone, and then filling out a written application. From there, you will provide documentation. After this, the factor will review your invoices and approve them if they qualify. This process can take about a week, and then once you are approved, you can receive cash in as little as a day or two.
There are many benefits that come with AR funding. Firstly, unlike with a bank loan, you will not be in debt. Factoring just involves selling invoices. Also, the process is fast. This is exceptional for small businesses that are going through a slow time. Also, good credit is not needed as it is with a traditional loan. The thing that matters here is the customer that will be paying the invoice. Flexibility is another reason that owners opt for factoring. No long-term contracts will be made, and usually you can factor as many invoices as you like. For instance, if it has been a tough year, you can choose to factor more. When times get good, you can factor less. AR funding is also a good way to improve cash flow. If you need funding or are looking to grow your business, this can be the method for you.