You can easily apply online for accounts receivable financing with Lendio. Often referred to as invoice financing, accounts receivable financing is a short-term asset-based funding solution — a type of cash advance. By selling accounts receivable or purchase orders, small business owners can turn outstanding receipts into operating cash.
What is Accounts Receivable Financing?
This type of financing is a good choice for small businesses and startups strapped for operating cash flow. As a valuable financing solution, it has a higher success rate of approval and can readily resolve slow-paying customers and other business issues affecting your line of credit.
Accounts receivable financing can provide your small business with working capital. These are some of the highlights of this type of business loan:
- It can help your business leverage their unpaid invoices, providing a cash injection into the business
- You can get business funding in as little as 24 hours
- You can receive up to 90% of the face value in advance
- Improve immediate cash flow for salaries, hiring additional staff, or other business expenses
- You don’t need excellent credit scores
- It can allow your business to keep loyal customers on longer payment terms
- It opens opportunities to invest in growth and operations sooner than anticipated
- It provides secured financing using the value of the invoices and the creditworthiness of your customers
If you think this type of financing is the right one for your business, Lendio can help you access a network of over 75 lenders nationwide. You can easily apply online, and Lendio’s team will support you through the application process.
How Do You Qualify for an Accounts Receivable Loan?
Finding the right lender at the right price point can be a hassle, and it can be a time-consuming process to approach different lenders and submitting multiple applications. Lendio is one of the world’s leading lender facilitator services, helping business owners locate the right lender for their business. Lendio has a nationwide network with over 75 lenders in their marketplace accessible by using a single application; this provides the best resources to find the right lender at the right price for your business.
The current business climate is volatile — cash forecasting is stressed. Reports show that 20-30 % of a company’s receivables are not getting paid; 78% of accounts payable departments report late paying invoices. Many companies face a cash flow crisis. The need for immediate cash is driving the interest levels we see in accounts receivable financing. The need to unlock a company’s working capital has never been greater. Using a business loan like the accounts receivable financing, companies can liquidate their purchase orders and invoices by selling them to banks and other funding sources. It’s a fast, cost-effective way to improve cash flow.
Should You Consider Other Business Funding Options?
Accounts receivable financing is also sometimes known as factoring. These are some of the considerations to have in mind to see if this may be the right option to finance your finance:
- With traditional factoring, a business’ accounts receivables are sold to a bank or other third-party.
- Although a company gets immediate cash access, the amount received is considerably less than other accounts receivable financing forms.
- The amounts are typically 85% of the invoice, less various fees due to the funding company– the 15% balance is withheld until the funding company has received payment from the customer.
- While companies can select which customers they would like to bring into the factoring program, they must sell all invoices for that particular customer.
Accounts receivable loans require you to work with a financing company that will advance your capital in exchange for your accounts receivable outstanding invoices. It is an excellent way of increasing the chances of getting financing, as well as your cash flow. The funding company advances you 80-90% of your invoices’ value and retains the balance that will be paid to you once your client pays their invoices. This type of financing offers more competitive pricing and flexibility.
The beauty of applying with Lendio, they can also offer alternative options to fund your business since they can also help you with:
- SBA Loans
- Business Lines of Credit
- Short-term Loans
- Merchant Cash Advances
- Term Loans
- Equipment Financing
- Commercial Mortgages
- Start-up Business Loans
- Business Acquisition Loans
How To Get Approved For an Accounts Receivable Loan
Lendio‘s accounts receivable financing professionals can help you navigate these issues and guide you on how to get approved.
Financing companies may verify your customers’ creditworthiness—customers’ poor credit or weak revenues could disrupt your financing plans if they have a history of late or missed payments.
Although accounts receivable financing differs from traditional term loans, it can be structured similarly but can also be structured as a line of credit.
Further, selective receivables financing gives your business the option of selling the accounts receivable of their largest, most creditworthy customers for immediate payment. You have total control of picking which receivables to sell and obtain funding for the invoice minus minimal financing fees.
This option not only facilitates a more strategic, targeted approach, but it also provides more flexibility, delivering more value. Since financing rates are based on your client’s credit rating and your company’s financial performance, they are usually much more competitive.
Suppose your financials are strong, and you maintain strong long-term relations with your best clients, who also have strong financials and creditworthiness. In that case, you are more than likely on solid ground to qualify for accounts receivable financing loan. And, as your company grows, your line of capital can grow with you, allowing for more working capital as the need arises.
How to Apply for Accounts Receivable Financing with Lendio
As a top-rated accounts receivable financing facilitator, Lendio help find lenders who can turn your outstanding invoices into cash to get the cash flow you need when you need it. You can read over the 8,000 customer reviews they have in Trustpilot Reviews, rating them with 4.8 out of 5 stars.
By filling out an online application, Lendio’s accounts receivable financing experts will ask you all the right questions to line you up with lenders who would be interested in financing the purchase of your receivables.
Choosing Lendio is one of the quickest and easiest ways to improve your cash flow. Lendio’s financing application is simple — you can complete it in just a few minutes — and lenders will provide approval in as quickly as two business days. Once you are approved, and your account is set up, funding can begin as soon as 24 hours after submitting your accounts receivable invoices.
You can get started with a few simple steps:
- Fill out one no-fee or obligation online application. It will take you about 15 minutes and will not impact your credit scores.
- Explore business loan options from 75+ lenders. Lendio will support you in choosing the best one.
- Once approved by your lender, you can get the capital you need in as little as 24 hours.