Accounts receivable financing (AKA factoring) is a way for companies to access their working capital and gain access to a steady cash flow for their business. Companies of all types and sizes are utilizing accounts receivable financing services to grow their businesses. So what is accounts receivable financing and how can it help your company? Accounts receivable financing in a nutshell Accounts receivable financing, also known as factoring, is simply a cash flow solution that turns your invoices into quick cash. It is extremely common to use factoring services in the business to business sector, as companies are then able to use the advanced funds for immediate business costs instead of having to wait 30, 60 or even 90 days for a payment.

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Factoring (fak-ter-ing):
The sale of a company’s
accounts receivable
invoices to a factor to
obtain working capital;
this is also known as
receivables factoring,
invoice factoring, bill
factoring, accounts
receivable factoring,
accounts receivable
funding and invoice
discounting. It is a popular
method of financing used
worldwide to help all types
and size of companies.
Accounts receivable financing (AKA factoring) is a way for companies to
access their working capital and gain access to a steady cash flow for their
business. Companies of all types and sizes are utilizing accounts receivable
finacing services to grow their businesses. So what is accounts receivable
financing and how can it help your company?
Accounts receivable financing in a nutshell
Accounts receivable financing, also known as factoring, is simply a cash flow
solution that turns your invoices into quick cash. It is extremely common to
use factoring services in the business to business sector, as companies are
then able to use the advanced funds for immediate business costs instead of
having to wait 30, 60 or even 90 days for a payment.
It works like this:
1 You send your accounts receivable, or invoices, to your factoring
company
2 The factoring company pays the you up to 90% of that
invoice in 24 hours, while keeping the rest in a reserve
account
3 Your factoring company professionally handles the
collection of your invoices
4 You receive the remaining invoice amount that was in the
reserve account, minus a small fee
It’s a relatively simple process that allows companies to access their working
capital while focusing on growing their business.
Recourse and non-recourse factoring
There are generally two major types of accounts receivable financing that
companies can choose from: Recourse factoring and non-recourse factoring.
Recourse means the customer assumes the risk on invoices that aren’t
collected within a certain number of days. Non-recourse factoring means
the factoring company takes the risk on invoices that aren’t paid within a
certain number of days.
Think accounts receivable financing is exactly what your company needs?
Give us a call at 800.705.1500 or shoot us an email at
info@ecapital.com.
Who is eCapital
anyway? We’re in the
business of buying your
accounts receivable to give
you fast cash and financial
freedom.
Connect with us and
find out more.
What is
ACCOUNTS RECEIVABLE FINANCING?
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