Accounts Receivable Financing

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Accounts receivable financing

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What is Accounts Receivable Financing?
If a business' cash flow is inadequate because of delinquent accounts or other similar circumstances, receivables can be financed.

One of the advantages to this type of financing is that it will free capital from the waiting period required by normal trade terms. This allows a business' capital to be more profitably employed for other purposes.

The accelerated cash flow can result in any combination of tangible results, such as increased volume, earning of trade discounts on purchases from suppliers, or the ability to make more advantageous purchases by having available cash.

The Process for Accounts Receivable Financing
In today's marketplace, accounts receivable represent another form of collateral for a business loan. We at Gateway Funding can help you turn your accounts into cash. This is how it works...

Fast Approvals The first step is a preliminary background credit investigation and appraisal of the account's collateral. Other areas of concern include industry practices, concentration in accounts and account aging. Once this information has been evaluated and approved, a prospect can receive cash on their accounts almost immediately.		Amount of Advance The usual advance against accounts is approximately 75 to 80% of net accounts, after deducting trade discounts, eliminating delinquent accounts and adjusting for undue concentrations.

Basic Mechanics Financing of accounts may be conducted under a notification of customer or a non-notification of customer arrangement. The difference lies in whether the customer is advised by a legend on the invoices and statements that the accounts have been assigned and are payable to the finance compnay. As clients' payments are received, clients forward them for crediting. Interest is charged on the daily balance of the advance outstanding.

For comments or suggestions, email: csalit@gatewayfundinginc.com

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