How to use accounts receivables to finance your business?

Inventory financing is a type of asset-based financing where working capital is provided to a company through accounts receivable, inventory, machinery, equipment as a collateral. Accounts receivable financing or factoring use outstanding accounts receivable as a means of financing. Both methods are usually used as a quick access to a working capital, money you use for daily operations. This can be alternative to a bank loan especially if you own a start-up company. There are other financing companies that can offer you factoring services and really help you manage a positive cash flow.

Pledging accounts receivable means that you use your accounts receivable that are not paid yet as a collateral to obtain a loan but you are still responsible for collecting a loan as a business owner. Lender picks accounts receivable they want to accept as a collateral. Accounts receivable that are overdue or ones in which you extended the credit for too long are very likely to be refused by the lender. New invoices are more valuable than the the old ones. I other words the easier is to collect a bill the more valuable it is. Lenders usually loan 70% to 80% value the invoice.

Factoring accounts receivable has more advantages. It means that you sell your unpaid invoices to a factoring company. Company gives you in advance 70% to 90% of total value. After the accounts is paid you will get the rest, minus the small 2-3% fee. One of the biggest advantages is that factoring company takes all the risk so instead of wasting your energy on collecting bills you can focus core of your business. We have already talked about importance of positive cash flow so invoice factoring might be just what you need to maintain it. Don't be hesitant to use especially if it will help you avoid bankruptcy caused by unpaid accounts receivable.

At Emry Capital we are giving you a chance to turn your unpaid invoices to a working capital. We offer you credit lines up to $5 million depending on the strength of your customers and rates as low as 0.25 per week. You can decide which and how many invoices you want to submit. You can apply online with basic documentation and get approval as fast as 24 hours.