BUSINESS LOANS FOR STARTUPS AND FAST GROWING BUSINESS
Accounts receivable financing aka Factoring Invoices is a widely accepted form of financing to increasing the working capital in your business quickly. This method of financing uses your company’s accounts receivable as collateral. This form of financing works by selling your business’ outstanding invoices at a discount to a factoring company (aka an AR financing company) for immediate cash flow.
What is Factoring? | Factoring Invoice 101
Advantages of Factoring Invoices with PMF Bancorp:
- Funding in 24 hours
- Regulated and Licensed for last 35 yrs
- Providing Invoice Factoring as well many other Financing Programs
- Providing Business Loans, Inventory, PO, and Trade Financing as well.
- Providing Credit Insurance and Credit Monitoring of All your Customers
- 24 / 7 Online access and helpful account managers with yrs of experience…
Experience counts when dealing with your most important business assets.
More details on Factoring Invoice Financing Programs:
In factoring, a maximum account line is given, but the most important issue to have your customers approved as eligible factoring accounts. There is also the advance rate which really varies based on the credit worthiness of the customers. Many factoring companies like to provide high advance rates to attract new clients but these advance rates are always subject to change. In fact, PMF Bancorp’s advance rates are often 100 or 200% higher than other firms because we have so many more lending programs than the other firms since we are a licensed commercial lender.
Concerning invoices to be funded, the amount funded will depend on the gross amount of the invoice or receivable, the credit worthiness of the account, the age of the specific receivable / invoice, your industry, as well as many other criteria. Naturally, a more current invoice will be easier to process and to provide the maximum advance. The amount received from an AR financing line will be less than the total value of the invoices that your business assigns as collateral.
The repayment period for Invoice Factoring or an AR line is generally shorter than for most other loans. Since payments are made as invoices are collected. The factoring invoice advance should be covered once all the invoices have been paid. In the majority of cases, the term for repayment is no more than 90 days. Alternatively, our business loan product deducts payments from your operating account on a monthly basis typically.
The benefits for your business to use accounts receivable financing are clear and direct. Not to mention you will have more working capital for growth, you will also have more free time without the worry about credit and collections. With your extra time, you will be able to focus on other more profitable activities like expanding a business line or selling more products or services. In addition, this extra access to working capital will enable you overcome the problem of having the majority of your cash tied up in AR or inventory.
As a direct result, you can focus on growing your business and bringing in more profit.
Through this business financing tool, you can obtain working capital effectively and efficiently for small startups and/or fast growing business. At the same time, this financing choice can begin a working relationship with access to a variety of other financial services. PMF Bancorp is a commercial lender that can provide AR financing as well as an array of other financial services that can help take your business to the next level of profitability and productivity. Beyond factoring invoices, PMF Bancorp can provide Business Loans, receivable management & collections, trade financing (i.e. Letters of Credit), equipment financing, and credit insurance. As a side note, there are small legal definition differences between Invoice Factoring and AR financing, but they are not material differences to the company needing working capital so for our discussion above we consider them synonymous.
If your company is considering an accounts receivable loan or other similar service, then feel free to contact PMF Bancorp’s seasoned staff at 800-218-9000 or fill out our Quick App.