Accounts Receivable Factoring

Invoice financing for startups can help growth by improving cash flow

What is Accounts Receivable Factoring?

Accounts receivable factoring is a financial service that enables businesses to convert their outstanding invoices into immediate cash. This service enhances cash flow by providing quick access to up to 90% of the value tied up in unpaid invoices, allowing businesses to meet their financial obligations and invest in growth opportunities without waiting for customer payments.

 

Unlike Invoice Discounting, when factoring the lender will normally handle your credit control. This will save your business time as you will not have to chase your clients for payment, allowing you to focus on your business.

*All credit profiles considered
Invoice financing for startups can help growth by improving cash flow

How Does Accounts Receivable Factoring Work?

  1. Create Invoice:  You provide goods or services to your customer and issue an invoice.
  2. You submit the unpaid invoice to a factoring provider.
  3. Immediate Cash Advance: The factoring provider advances you a percentage of the invoice value, typically between 70-90%.
  4. The factoring provider takes over the collection process and directly contacts your customer for payment – in line with agreed terms.
  5. Your customer pays directly to the factoring provider
  6. Once the customer pays the invoice in full, the factoring provider releases the remaining balance to you, less any pre agreed fee.

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Benefits of Accounts Receivable Factoring

  • Receive immediate funds to cover expenses, invest in growth, or manage unexpected costs.
  • Save time and resources by letting the factoring provider handle the collection process.
  • No trading history required.
  • Relies on creditworthiness of your customer.
  • Option to insure against risk of non payment.

Is Accounts Receivable Factoring right for your business?

With a wide and varied range of funding solutions and lenders, it can be difficult to understand which is the best option for your business. At Aim Financial Solutions, we will help you to understand which funding options are the best solution for your business and we will help you to secure the most competitive terms with the best lender for your circumstances.

Ready to unlock your working capital? Contact us today to learn more about how invoice finance services can benefit your business.

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