Using Accounts Receivable Financing to Manage Cash Flow
Accounts receivable (AR) financing is a process by which your company sells some or all of its commercial invoices to a factoring company at less than face value, in exchange for a quick infusion of cash which can be used for any business purpose.
This process is also called ‘factoring’. With factoring, businesses can get an advance on invoices as soon as the buyer agrees to pay. So instead of waiting 30, 60, 90 or even 120 days for customer payment, factoring can provide cash immediately.
For AR financing, you need to have an ‘approved to pay’ invoice from your clients. Purchase order financing is another good option for getting cash advances on large orders before invoicing your clients.
Questions? Call or text 203-247-4358
Benefits of Accounts Receivable Financing
In addition to unlocking working capital, AR financing offers other clear benefits:
Quick funding facility set-up in 1 to 2 weeks
Credit risk and collections management
Can be a bridge to longer-term financing
No balance sheet debt created
No financial covenants or collateral required
Questions? Call or text 203-247-4358
Industries That Can Benefit
Many industries can take advantage of AR financing:
Manufacturing
Oilfield services
Trucking
Heavy construction
Solar energy
Information technology
Staffing
Healthcare Receivable Financing
And many others!
How Does Speritas Capital Help?
Speritas Capital can arrange AR financing from $250,000 to $30 million to support start-ups to lower middle-market companies.
Companies experiencing high growth, negative equity or credit issues can benefit from accounts receivable financing.
If you’re able to use other types of collateral, you may want to consider using an asset-based line of credit.
Because Speritas Capital is a debt advisory firm, we have access to a wide variety of asset-based lending structures. We’re not beholden to any one lender or structure so we can use our creativity and experience to design a structure that truly fits the needs of our clients.
We work with clients to develop a financial presentation which properly represents the status of the turnaround, the strength of the collateral pool, and the sustainability of the business.
We can also arrange financing for each asset type separately.
So whether you’re a smaller firm looking to grow through accounts receivable or purchase order finance, a lower middle market firm looking for more liquidity or a lower cost of funds, or an operating company looking at an acquisition, we can help you assess your options, introduce one or more lenders, and assist in structuring the deal.
Questions for Us?
You need a strategic, cost effective solution to your financing needs and a financing advisor you can trust. And one who never takes upfront fees. Let us put our decades of banking and structuring experience to work for you – email Speritas Capital Partners with your questions about accounts receivable financing today.
Call or text Jeff Bardos, CEO
directly at 203-247-4358
or schedule a call.
