Account Receivable Loans – Good Idea For My Business?

Every business owner has been talking about it. The idea that the lending market is getting tighter by the day. Trying to get a business loan as a small business, especially one that is new to the game can often be impossible. So what options are out there for a business that is new to the game or has been around for awhile but can’t qualify for a traditional loan? Account receivable loans are an option that is available to small businesses that deal with a lot of invoices to clients. These can be a good option for construction contractors or catering companies that are always issuing invoices.

What are account receivable loans?

Account receivable loans allow a business to use their receivables as collateral. This means that the money that is owed to them by their customers can act as collateral in a lender agreement. The lender will advance the amount of capital that is a reduced value of the invoice. The lender will determine how much they are willing to pay for the invoice based on several factors including the age of the contract. A newer contract will receive a higher percentage of the overall value of the invoice. After the invoice is paid back by the business’ client, based on the terms of the agreement between the lender and the borrower, the borrower will pay the amount advanced plus a set percentage. Often times there will be a fee attached to the agreement as well.

The benefits of account receivable loans are that they allow businesses to continue with forward progress in their business. They do not have to wait for their clients to pay them back in order to pay their bills or employees. It also allows them to move forward with potential business expansion opportunities. The challenge is that as a business owner you have to make sure you understand the opportunities and the risks. Getting access to cash quickly through account receivable loans can be a huge positive for borrowers; however, you have to know what you are giving up. In this version of account receivable financing, you are giving up a portion of the unpaid invoices from your clients. Depending on the urgency and need for cash that may or may not be worth it.

Alternative Options

There are other options out there for you. A Merchant Cash Advance is another option that doesn’t require any collateral to be taken in order to get the funds. Instead, eBusiness Funding takes a percentage of your daily credit card sales. This percentage is pre-determined and fixed percent.

The requirements to qualify are simple. We have a 95% acceptance rate for those who met our minimum requirements. Accepted applicants must have been in business for at least six months; as well as, do at least $10,000 a month in sales revenue.

Because we do not take collateral in exchange for the advance there is a higher risk on our end. But despite these risks we can still get you approved in as little as 24 hours. Even better we can get you the cash you need quickly and deposit it into your bank account in as little as 72 hours! Another great part is you can use the cash the way you need to for your business plan. When you apply we are not going to ask for a five-year business outlook.

Getting Started

So, are you ready to get the cash you need for your business quickly and think that a Merchant Cash Advance could be the right option for you? Call us now at 305-985-6593 or complete the contact form on this page.