Abstract Capital Does
Accounts Receivable Factoring
Abstract Capital Group – offers invoice factoring to various companies that depend on accounts receivable funding to drive their success. Today, across the U.S., we’re providing clients with access to debt-free working capital by converting accounts receivables into ready cash.
Benefits of Accounts Receivable Factoring
Factoring Is Not A Loan
While accounts receivable factoring is frequently placed under the heading of “lending solutions,” it is not a loan. Accounts receivable factoring does not require collateral does not impact business credit ratings and does not place any debt on the balance sheet. Factoring is a simple exchange of receivables for immediate working capital.
Improves Cash Flow
The success of every business relies on having a strong cash flow. When revenue is tied up in unpaid receivables, cash flow can slow to a trickle, which can impact the ability to cover overhead costs, make payroll, and even take on new clients. Since most businesses issue invoices with payment schedules of 30 days or longer, gaps in cash flow can become a recurring issue. Accounts receivable factoring eliminates the wait by turning invoices into cash and making funds available within 24 hours.
Because factoring is not a loan, businesses can preserve their credit ratings, avoid debt, as well as ongoing interest rates. The improved cash flow means revenue will come in faster and proportional to sales without waiting. This gives businesses a huge advantage because they are not only able to cover overhead, but because of the accelerated cash flow that factoring provides, they are able to build up capital reserves for growth.
Frequently Asked Questions
Invoice factoring, also known as accounts receivable financing, is an alternative funding option for small business owners. By financing your accounts receivable, you have fast access to working capital that you can use to build your business.
Factoring financing is not a loan – rather, it is a way for you to turn existing accounts receivable into cash. The factor actually purchases your receivables at a discount, so there is no interest to repay and no new debt on your balance sheet.
The factoring process is pretty straightforward:
1- Submit unpaid invoices for work completed
2- The factoring company verifies invoices and advances you the funds (up to 95% of the invoice amount) within 24 hours
3- The factoring company collects payment from your customer according to your payment terms
4- When payment is received, the factor releases the remainder of the invoice amount, minus a small factoring fee
Businesses that are selling goods or services to other businesses can use invoice factoring to gain necessary working capital. Factoring companies can help businesses of all sizes in almost any industry. Industries include staffing, transportation, manufacturing, distribution, information technology and many others.
You don’t need to be in business long – we can find factoring for start-ups. If you have an invoice, we can help get you funded. Even if you don’t have an invoice yet but you just secured a new contract, we can get you set up.
All you have to do is give us a call or fill out an online form!