Invoice Financing Is A General Term Used For Asset Based Lending Products That Allow Companies To Finance Slow Paying Accounts Receivable. There Are Two Ways To Finance Invoices .The First Way Is Through A Sale . Invoices Can Be Sold To A Factoring Company In Exchange For An Immediate Payment. The Overall Apr , Typically 15-35% Is High Compared To That Of Banks Or On Line Term Lenders. But It's A Good Short-Term Solution , When Most Of Short Term Assets Are Tied To Accounts Receivable That Lets You Avoid The Lengthy Bank Loan Application. Its Also Much Better Compared To Expensive Merchant Cash Advances. Your Credit Score Doesn't Matter As Much . Your Clients Credit Scores Will Also Be Taken Into Consideration . Therefore Its A Good Solution If U Have Receivables But Haven't Built Up Your Credit Enough To Get A Credit Line From A Bank.
Don’t let pending payments from customers hold your business back. Call Garrtech Funding and apply for an invoice finance today
Any business with a B2B model can qualify for invoice financing. Profit margins, revenue or the time span of business does not impact its approval to a notable extent. However sometimes minimum revenue requirement is $50,000. We can assist you further on the same.
Types of Invoice Financing
Usually, the basic type of invoice financing is commonly seen, but there are other types too. Some financiers even lend 100% of the entire outstanding invoice amount. The repayment is done weekly over a predetermined period of time. Often it is 12 weeks till the advance is cleared. This case might happen that customer pays to your lender directly instead of you.
Sometimes it is confused with invoice factoring but they are not same at all.
The processing fee is usually 3% of the amount and the lending company also keeps a weekly factoring fee of 1%. This type of financing can benefit a business with immediate cash flow.
You can contact us to know more.
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Invoice financing is a way for business owners to maintain the flow of funds even in the absence of payments from the customers. It is also known as accounts receivable financing where the business owner can show invoices of pending payments from the customers and get a loan from the creditor. In return, the creditor gets some percentage of the pending invoices as fees. It is a great way for business owners depending on payments from customers to maintain their fund flow through invoice finance.
Invoice Financing, also referred to as accounts receivable financing is the fund collateralized by business invoices. It is a fast way of adding money to the business at the time of need and helps you to gain an advance of approximately 85% of the invoice value. Usually, the remaining 15% is paid later. It helps in managing the late payments from customers or cash flow slowdowns.
Unlike line of credit, accounts receivable financing has many benefits. The lender here does not have to create an unsecured channel for the borrower to take money from. The invoices in this kind of financing include using invoices as collateral. However, there does exist a risk of the customer never paying the invoice back to the business owner. In that case the collection process is difficult and expensive.
- Through invoice financing you do not have to wait until the invoice payment
- Collateral is in the form of invoices
- Invoice factoring is based on the credit of invoiced business
- Accounts receivable financing chargeshigher than conventional financing
- Charges are based on invoice to be paid off
What is the most frustrating part of the business? It is to get payments from customers on time. Delayed payments tend to hamper your business growth and this is where invoice financing comes to your rescue. This type of financing can solve your cash flow problems in a convenient manner. It might seem to be an expensive method of financing but it is also one of the predictable ones.
- Maximum invoice amount is 50% to 90% of the total invoice amount
- Repayment is based on customer payment of the invoice. When that is done, the remaining 10% to 15% amount is released deducting the charges
- Factor fee is approximately 3% plus percentage per week outstanding
- Approval within a day
Advantages of Invoice Discounting:
- Quick Cash: Invoice discounting is comparatively quicker and faster method to procure cash than applying for a Cash Credit in which credit institutions or banks take quite a lot of time in credit appraisal of the borrower.
- Releases Locked Cash: Invoice discounting releases cash that has been locked in customer invoices for a long period of time. Invoice discounting converts the company’s account receivable (debtors) into liquid cash. This may even be useful in cases or emergencies.
- Improves Cash Flow: Invoice discounting provides improved cash flow since generally 80% of the advance invoice amount (receivable) can be converted into cash thereby aiding shorter working capital cycles.
- No Asset as Collateral: Cash can be obtained without using any assets as collateral; only invoices to which customers are yet to pay are to be submitted for the transaction.
- Allows More Room for Credit Sales: The company can choose to grow sales in terms of cash or credit. Sales that are on credit can be converted into cash quickly and the company need not bother much about the liquidity issue which comes with credit sales if invoice discounting process is in place.
- Confidentiality: In the case of invoice discounting, confidentiality can be maintained by the discounting houses. The suppliers and customers need not know about the borrowings of the company against sales invoices.
- Win-Win Situation in Business: The borrowing company can obtain the cash it needs whereas the customer can be given the credit period. This creates a win-win situation for the company and the company’s customer which in turn helps in building a healthy relationship with customers.
Garrtech Invoice Financing Customers who have been approved ...
- Revenue over $180000 - Credit score 600 - Time in Business +1 years 80%
- Revenue over $300,000 - Credit score 630 - Time in Business +4 years 50%
- Revenue over $600,000 - Credit score 680 - Time in Business +7 years 30%
- USA SBA Loan approval 2015 - $350k to 2m 50%
- USA SBA Loan approval 2015 for existing business 60%
- USA SBA Loan approval 2015 for new business 40%
Hi Merchant , My name's Sha I'm your Funding Advisor at Garrtech Funding and specialist in Invoice Financing . We also provide Business Cash Advance & Merchant Cash Advance . Don't hesitate in asking about this program. Get in touch with me Toll Free 1-800-880-0349
Hi Merchant , My name's Parvin I'm your Funding Advisor at Garrtech Funding . I'm the specialist in SBA Loans . We Also provide Business Cash Advance & Merchant Cash Advance . Don't hesitate in asking about this program. Get in touch with me Toll-Free 1-800-880-0349
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