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Accounts Receivable Financing

Overview of an Accounts Receivable Loan

Accounts receivable financing–also known as accounts receivable factoring–is a way for small businesses to obtain fast working capital without the need for a loan or repayment.

A company’s accounts receivable–invoices sent to clients for goods or services rendered–are listed on a balance sheet as an asset. The small business can then sell these invoices to a larger company, taking on the risks of collecting the money owed by clients and providing the small business with immediate funds.

 

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Loan Amount

$2,500 to $250,000

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Payback Period

3 to 18 Months

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Interest Rates

Starting at 10%

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Qualifying Time

1 day but could be longer

What is a Factoring Loan?

This is a way for small businesses to obtain fast working capital without the need for a loan or repayment.

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Who Qualifies for an Account Receivable Loan?

A small business will usually be required to “age” its invoices before receiving accounts receivable financing. For accounts, less than 30 days old, a provider may pay around 75 percent of the value of the invoice. But for accounts that have been outstanding for a longer amount of time, the provider will typically pay less. Some providers are unwilling to take on accounts that have been outstanding for longer than 90 days.

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Annual Sales

Any

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Credit Score

NA

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Business Age

Prefer 1 Year+

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