Accounts Receivable Factoring (AR Factoring) is the selling of your Invoices to a Factoring Company. It is not a loan like a line of credit from a bank but the sale of an asset (Your Invoices) to a third party Invoice Factoring Company.

Many terms and abbreviations are used to describe the same transaction, such as AR Factoring, AR Funding, Accounts Receivable Financing, Invoice Factoring, etc. However, they all mean the same thing. The option of factoring is excellent because it ends the practice of waiting 30-60 days before receiving payment. An AR Factoring company will buy your invoice(s), advance you from 75-92% against their face value, and pay you the difference less their fees when your client subsequently pays the invoice.

Many AR Factoring companies specialize in particular industry types. Some are trucking, medical, or construction only. Businesscash.com has expertise in each area and has funded every size and type of company since 1998.

Selling your receivables to an invoice factoring company is a simple, 3-step process:

  • You provide your client with goods or services and issue an invoice.
  • You sell the invoice to the factoring company that advances you up to 92% for them. The average advance is 85%.
  • Once your client pays the invoice, the factoring company returns to you your retainage, less a fee.

In contrast to other financing products, AR Factoring is easy to obtain and can be set up in days. A critical benefit of AR Factoring is that factors make their credit decision based on your client’s credit history. AR Factoring is an ideal tool for small and medium-sized businesses that cannot obtain bank financing but have solid paying customers.

Want to talk more about AR Factoring? Call (888) 400-5930 or use the fast, safe & secure online funding application.

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