Receivables Financing
Receivables financing is a way for businesses to get cash quickly by using their unpaid customer invoices as collateral. Instead of waiting for customers to pay, a company can sell these invoices to a financing company or get a loan based on the value of the invoices. This provides immediate funds to meet expenses, invest in growth, or manage cash flow. It’s a practical way to ensure that a business has the liquidity it needs while waiting for customers to settle their accounts.
Additional Insights
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Receivables financing is a way for businesses to access cash quickly by selling their unpaid invoices to a third party, often called a factor. Instead of waiting for customers to pay their bills, the business receives a portion of the invoice amount upfront, allowing them to improve cash flow and invest in operations. Once the customers pay their invoices, the factor collects the payments and keeps a fee for their service. This financing option helps businesses manage their finances without taking on debt or altering their credit.