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Accounts receivable (A/R) financing—factoring into your success

Accounts receivable financing and factoring go by many names—AR funding, AR finance, financing receivables, invoice factoring or selling accounts receivable—but no matter what you call them, they are a great way to accelerate cash flow for your business.

Instead of waiting 30-90 days for customers to pay their invoices, Accord can advance up to 90% of the face value of your outstanding invoices. This frees up cash for everyday operating expenses and expansion, and saves you the management time typically tied up with credit analysis and collections.

Accounts receivable financing, including invoice factoring, is a popular alternative to bank financing for start-ups, growing businesses and more mature companies looking for maximum flexibility. Instead of focusing on your company’s hard assets, or tying up collateral in real estate or personal assets, accounts receivable financing unlocks the value of your customers and the accounts receivable you’ve earned but haven’t yet collected.

Most small and medium-sized businesses are constantly short of cash, especially those selling on terms.

If your company is growing quickly, or had a challenging event disrupt your normal business cycle, the cash crunch can become magnified. When cash is tight or collecting your accounts receivable is an issue, AR financing can be the solution you need to get ahead.

Accounts receivable financing is the most effective working capital solution when your business:

  • Doesn’t qualify for conventional bank financing
  • Needs funds quickly to grow and expand
  • Is managing a challenging transition
  • Is constantly negotiating with customers and suppliers to fill gaps in the cash flow cycle
  • Has large customer concentrations
  • Experiences challenging seasonal demands

Do these problems sound familiar? Accounts receivable financing may be the answer. Whether you are a manufacturer, wholesaler, distributor, professional services company, importer or exporter and need from $100,000 up to $20 million, our accounts receivable financing or factoring services can help you thrive.

You can start with accounts receivable financing as low as $100,000 and grow up to $20 million, with maximum flexibility to draw on and pay down as your business needs evolve.

Whether your business is young and growing, mature, or undergoing a difficult transition, accounts receivable financing allows you to:

  • Access funds with full flexibility, without restrictive bank covenants
  • Grow at your pace with a credit line that grows with your sales
  • Extend payment terms to your good customers
  • Thrive even with large customer concentrations
  • Take advantage of discounts and special buys offered by your suppliers
  • Focus on your business, not on chasing your customers to pay more quickly
  • Finance your insured foreign accounts receivable

While traditional bank lenders focus on a company’s history of profitability and balance sheet strength, Accord focuses on the credit quality of your customers. We fund based on the value of your accounts receivable and not on financial covenants.

Invoice factoring itself is simple. When we purchase your accounts receivable, you are immediately given up to 90% of the money owed by your eligible customers. With cash in hand you can get back to running your business. Once we receive payment from your customers, we send you the remaining balance, less our lending fee that includes managing and collecting your receivables.

Along with financial flexibility, accounts receivable financing relieves you of the time spent on customer credit and collections, allowing your team to focus on strengthening key relationships and growing sales.

Accord is client-focused and technology-driven. You will benefit from our industry-leading factoring software that provides you with secure real-time access to your account information and activity. You will also benefit from our effective AR collection service and professional credit guidance.

We are a longstanding member of the International Factoring Association, where we strive to serve the invoice factoring community with frequent presentations on factoring, due diligence and industry best practices.

Accounts receivable financing for small and medium-sized companies has been the core of our business since 1978. Our experienced team has worked with companies in virtually every industry. We understand the challenges you face, and can craft a solution that’s best for you.

As our relationship grows, our ability to adapt and respond to your evolving needs and circumstances grows too. Once we get to know your market, your sales pattern and your team, we can help you grow with cost-effective financing solutions.

Frequently Asked Questions

Accounts receivable financing is a type of business loan where the lender provides an advance on the business’ unpaid invoices (typically less than 90 days old) in order to provide the business with additional working capital. Factoring, a transaction whereby you sell your accounts receivable to a factor, is a type of accounts receivable financing.

Accounts receivable financing has the major advantage of providing the money for the goods and services you sold 30 or more days before a typical A/R cycle. The only disadvantage of accounts receivable financing is that a there is a financing cost paid to the lender or factoring company that is providing the accounts receivable financing.

Accounts receivable financing rates vary greatly from one transaction to the next. Typically, rates are based on the advance rate required, the level of risk and the financial performance of your business.

Factoring involves the sale of your accounts receivable to a factoring company, whereas you can also finance your accounts receivable by borrowing via an operating line of credit, asset-based lending or other types of accounts receivable financing. When compared to these loan facilities, factoring companies can offer additional services, including credit guarantees, and can administer your accounts receivable. Factoring can also be structured as an off balance sheet obligation.

Recourse factoring is a common form of accounts receivable financing in which you must buy back receivables that the factoring company cannot collect. Whereas, with non-recourse factoring, the factoring company assumes the credit risk if your customer is unable to pay the invoice due to an insolvency or other financial issues.

Accounts receivable financing is often a challenge for small business and factoring is a great way for your small business to increase its cashflow in order to grow. By utilizing factoring, your small businesses can free up cash to invest in growth and outsource the administration of your accounts receivable. Call us to learn how you can take advantage of accounts receivable financing for your small business or startup: +1-844-932-9940 (Canada) / +1-844-725-4225 (US).

Factoring is a common practice in the transportation industry. By using freight factoring, you can get immediate access to cash to pay drivers, purchase fuel or maintain your equipment. If your transport business is looking to access additional cash through accounts receivable financing, you may also want to consider our equipment financing products.

You are best to work with an experienced factoring company, like Accord Financial, who has a successful track record working with companies similar to yours and will structure its accounts receivable financing solution to your business’ unique needs. Call us directly to learn more about accounts receivable financing for your business: +1-844-932-9940 (Canada) / +1-844-725-4225 (US).

You can visit the recent transactions section on our website to see how we’ve provided accounts receivable financing and other asset-based loan facilities to companies in a variety of industries.