Accounts Receivables Financing is a revolving line of credit secured by the company’s Accounts Receivable and is among the most efficient ways for a company to get the cash it needs for day-to-day operations–to pay bills, increase inventory or meet payroll.

By using their Accounts Receivable as collateral, a company can get a business loan for whatever it needs, for however long it needs it, without taking on extra term debt or diluting its equity.

The value of the Account Receivables remains on the borrower’s financial statement but is committed as security for the loan. As receivables are paid, the cash goes directly to the lender to pay down the outstanding balance of the credit facility. In turn, as a company needs additional capital, it can continue to borrow against the receivables up to a maximum amount set by the lender.

Accounts Receivable Financing can also benefit fast growing small and mid-sized companies because as sales increase, so too does the maximum credit available to them