The accounts receivable loans method works like an internal bank and offers an alternate way of reaching traditional sources of capital, such as Wall Street firms, banks, leasing companies, and joint venture partners. The structure also resembles off-balance-sheet financing by removing accounts receivable loans from the books and selling them on a non-recourse basis for their fair market value.
Traditionally, companies had access only to account receivable loans factoring programs, a process that involved pledging their accounts receivable as collateral in exchange for cash. Exercising this option also depended on the hospital's creditworthiness. Covenants of hospital bond issues, however, often prohibited them from pledging those assets and using invoice factoring as a source of account receivable loans.
Banks and other lenders use a variety of factors, some of them quite strict, to assess a client's suitability for their receivables financing programs. The criteria may include the size of the company, its credit rating, its total assets (minimum levels of working capital may be required), and the amount of the receivables. Accounts Receivable Loans Lenders also may require a minimum amount to be financed
invoice factoring company
and account receivable factoring
and accounts receivable financing
What should i know?
Accounts Receivable: A group of invoices. Monies owed for goods or services a company supplied to customers
Invoices: Statement for payment sent to a client’s customer for goods or services sold and delivered
Advance: Those monies transferred to the client when the factor buys invoices
Why Businesses Choose Us
Experienced Account Managers