How Spot Factoring Is Used To Finance The Accounts Receivables A Company Has On File

As a business owner, one of the most stressful things is a shortage of cash, because without it companies can be prevented from paying their bills or having the necessary capital for expansion. While a business loan can be an alternative, they can be complicated to apply for, and the approval process can take weeks. Rather than borrowing from a major bank, more companies are choosing to opt for Account receivables financing, as it can provide them with the cash needed in as little as 24 hours. Here are the spot factoring techniques used by an AR financing company.

Invoice Validity

Before an AR financing company can pay out on an invoice, they first have to verify its validity. They will conduct a brief phone call with the business responsible for the debt to ensure that it is an invoice that will be paid. They never need financial reports or account summaries, as this type of funding is not dependent on a company’s financial position, but rather the invoice itself.

Invoice Valuation

Once the invoice has been validated, they will then evaluate the invoice to determine the maximum amount of money that can be paid on the invoice. While it can vary, most invoices are paid at 96 percent of their face value, and the financing company assumes full responsibility for ensuring the invoice is paid on time. There are no upfront fees or charges, and no long-term contracts or agreements that have to be signed.

Funds Disbursement

After all the paperwork is completed, the company will release the funds to the business. The process is fairly quick, and most AR financing procedures can be completed in under 24 hours, which ensures a business will have access to the money they need to stay afloat quickly. Don’t waste days or even weeks dealing with a bank, when spot factoring can ensure a quick and easy transaction.

No business should have to deal with the stress associated with a shortage of cash. The team at Business Factors offers invoice financing services that can help when turbulent financial times strike. Contact them today to learn more and take the first step in ensuring a company has the money they need to remain operational and meet their financial obligations.