Improve Your Company’s Cash Flow with Accounts Receivable Financing (Factoring)
Unlock the value of your accounts receivable by factoring with Accord – flexible working capital finance from $100,000 to $20 million.
Accounts Receivable Financing (Factoring): Flexible Finance for Your Business
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.
Cash is king, as the saying goes, especially in the business world. But 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. But often that delay in collecting accounts receivable is a clue to the solution – AR financing can solve the financing puzzle.
Accelerate your cash flow with accounts receivable financing
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.
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. Since Accord’s funding is based on the value of your accounts receivable and not on financial covenants, Accord can say yes when a bank says no. 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.
Working capital that works for you
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
If these sound like familiar problems, accounts receivable financing may be the answer. Simply give us a call or email us to learn more or get started.
How accounts receivable financing works
The process of invoice factoring 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 balance of the holdback, less our fee for efficiently lending to your business, and 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.
Why choose accounts receivable financing or invoice factoring to finance your business?
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 along 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
The Accord advantage: service above all
Accounts receivable financing for small and medium-sized companies has been the core of our business since 1978. Our experience can be your advantage, with quick setup and competitive terms. And our senior team has worked with companies in virtually every industry, so we’ll understand the challenges you face and 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.
Accord is client-focused and technology-driven, so you’ll 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 receive professional credit advice. We are also 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.
Is accounts receivable financing right for you?
If 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 grow and prosper. Some of the industries we serve most often include:
- Manufacturing (including automotive)
- Apparel and textiles
- Wholesale and distribution
- Media and telecommunications
- B2B services
Grow with us
By engaging Accord for your accounts receivable financing needs, you open the door to a range of other financing options. Once we get to know your market, your sales pattern and your team, we can help you grow with cost-effective financing solutions such as:
- Asset-based lending (including PO financing / Letters of credit and DIP financing)
- Accounts receivable management
- Equipment finance
- Supply chain finance
- Small business loans
Accounts Receivable Financing / Factoring FAQ
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.
What are accounts receivable financing rates? 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.
What is the difference between factoring and accounts receivable financing? 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.
What is the difference between recourse and nonrecourse factoring? 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.
Can Factoring be used by small business? 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).
How can freight factoring help transportation companies? 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).
Can you give examples of accounts receivable financing? 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.