Lenders provide finance to small firms based on their accounts receivable in accounts receivable financing. Then, businesses will use the money granted by the lender to pay off their current debts and carry on with business as usual. A business owner goes through a few processes with a qualified lender and obtains cash in less than 24 hours.

1. Accounts Receivable Financing:
Access Your Cash Today!
By – M1Xchange.com

2. Introduction
Accounts receivable financing involves lenders extending
funds to small businesses based on their accounts
receivable. Businesses will then use the funds provided by
the lender to pay their existing creditors and continue
operations as usual. The process is fairly simple: a business
owner completes several steps with a qualified lender and
receives funding within 24 hours.

3. Accounts Receivable Financing
Accounts Receivable Financing is a great alternative to traditional bank
financing and other methods of raising capital. This can help you get cash
today, and it's often at a lower cost than what banks will charge you. And
unlike other alternatives like factoring or invoice discounting, AR financing
doesn’t require collateral or credit checks so you don’t have to worry about
having bad credit or existing debt holding you back from getting the cash you
need.
AR financing is ideal for businesses that need access to working capital fast but
don't have time for lengthy processes that delay funding by weeks or months—
and it's even better if those delays could hurt your business in the end! Plus,
businesses who use AR financing will typically see their money within 24
hours because there are no long wait times involved in getting approved before
being able to receive funds (unlike some other forms of capital).

4. What is Accounts Receivable Financing?
Accounts receivable financing is a type of asset-based lending that allows
businesses to access cash by selling their unpaid invoices. It’s different
from invoice factoring in that it doesn't require the invoices to be paid in
full before they can be bought by the lender. Instead, AR financing
involves businesses receiving a percentage of what's due on each invoice
at a time when they need cash immediately. There are three main types of
AR financing: direct factoring, retail factoring and accounts receivable
loans

5. Benefits of Accounts Receivable Financing
• No collateral required
• No equity required
• No personal guarantees
• No personal credit reports
• No income tax returns
• Personal financial statements

6. How Does Accounts Receivable Financing Work?
An account receivable is an amount owed to a company by its
customers. This can be for products and services that have already
been provided, but not yet paid for. Accounts receivable financing is
when a business borrows money from another business to fund their
accounts payable.
A factor loans out money against accounts due from customers. The
factor buys the accounts receivable at a discount and then collects
them in full from the debtor companies. The debtor company then pays
off all of its debt by repaying the loan, plus interest, which makes up
for the discounted price that was paid for each invoice.

7. Who is the Best Fit for Accounts Receivable Financing?
Accounts receivable financing is ideal for many small businesses.
According to the Small Business Administration, there were 27 million
small businesses in the U.S. in 2018, accounting for 99 percent of all
employer firms and employing roughly half of the nation’s private-
sector workforce.
If you’re a small business owner who needs extra cash on hand to
cover payroll or other expenses, then accounts receivable financing is
likely your best option for accessing capital quickly and easily at
competitive rates. This funding source can also help startups get off the
ground by providing much-needed funding when they need it most—
before their business reaches profitability or before they receive an
investment round from investors.

8. For example:
 You have a high credit rating because your customers pay their bills
on time
 You know that some of your customers won't be able to pay their
bills immediately but will eventually come through with payment
plans once they receive their tax refunds or other sources of income
(e.g., bonuses)

9. The Process of an Accounts Receivable Financing Transaction
While you may be familiar with the terms "accounts receivable financing" and
"receivables financing", you may still be unsure what these processes entail. We'll break
down the process of an accounts receivable financing transaction to help you better
understand how it works.
 The client evaluates the applicant's business and decides whether or not to extend
credit
 Once approved, the client is given a quote based on their needs and type of business
 An agreement is signed between both parties outlining all details of the transaction,
including rate and fees (if any)
 A holdback amount is set aside from each invoice until it has been paid in full
 The account is funded within 24 hours (usually same-day)
 . If a payment schedule has been agreed upon, payments will be automatically
deducted from your account every month

10. AR financing is a great alternative to traditional bank financing.
For many businesses, accounts receivable financing is a great
alternative to traditional bank financing. Accounts receivable financing
gives you access to the cash tied up in your invoices and allows you to
get the money into your hands faster.
Here are just some of the benefits of accounts receivable financing:
 You can use it for any quantity of invoices.
 It has no impact on your credit rating or business credit score.
 The interest rate is fixed rather than variable, so there’s no risk of
fluctuating rates hurting your bottom line at a later date.

11. Conclusion
The best part about a receivables financing company is that you
don’t have to make any big changes to your business. You can get
access to money in as little as 24 hours and with no collateral or
signature. And because there are no upfront fees or prepayment
penalties, this can be the ideal option for small businesses that want
capital without sacrificing control over their finances.

12. ThankYou