RECEIVABLES FUNDING

Accounts receivable refers to all invoices that have been sent to a business' customers, but have not yet been paid. The term is often used interchangeably with invoices. In short, an invoice is a bill; accounts receivable is a collection of bills.

Accounts receivable funding, also referred to as factoring, is the purchase of accounts receivables from a business at a discount. Overall, businesses that utilize this financing as a business strategy agree that it is the easiest, quickest and least expensive way for a business to raise working capital and improve cash flow.

The Benefits of Accounts Receivable Funding include:

• Unlimited capital - As your sales increase, so does your working capital -- allowing you to meet increasing production demands. Accounts receivable funding is the only financing model that provides capital based on your sales activity.

• Bad debt protection - Many funding sources offer non-recourse funding, assuming the risk of delinquent debt and allowing you to eliminate this expense from your business income statement.

• Invoicing simplified - Funding sources take responsibility for the processing of receivables, including computerized invoice posting, check deposits, and payment reports -- all available to you in "real time".

• Greater purchasing power - With working capital to purchase raw materials, you can take advantage of better terms and volume discounts from your suppliers -- significantly offsetting the cost of accounts receivable funding.

• Preserving profits - Since businesses that utilize accounts receivable funding receive their cash immediately, there is no further need to offer your customers terms unless you choose to. Take your money off the table and further offset the cost of accounts receivable funding.

• Maintain control and equity - As opposed to compromising your business goals by accepting venture capital financing or a new partner, maintain 100% control & equity, as well as resolve your cash flow concerns.

• Flexibility and choice - Based on your specific cash flow needs, you have the flexibility and choice to determine how much or how little of your receivables you want to fund from month-to-month.

If your business sells products or services to other businesses or to the government on terms, a line of credit that can range anywhere from 30 to 60 days or more, you are a strong candidate for accounts receivable financing. (For more on A/R funding, click on "Additional Information" .)

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