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Accounts Receivable Funding – Debunking the Myths

Invoice factoring gives a company enjoy the freedom of gaining financial stability without adding any debts to its pmf-diversification-page6-webbalance sheet. It is the best way to improve your credit rating and sustaining through tight cash flow. With banks tightening their norms and dictating their ways to get back their funds, a reliable invoice factoring company in Miami, Florida is what most manufacturers and other commercial setups are preferring in this region.

Meeting ongoing operational expenses is necessary for any business to carry its activities smoothly. But, delayed payments from clients can sever funds into your system. Resorting to  business receivable factoring is the best recourse available to get immediate funding  without any hassle.

However, it happens there are still some myths surrounding this method of money lending. There are some misconceptions that keep businesses away from this easy source of funds. We are here attempting to debunk some delusions.

#1 Myth – Only financially unstable businesses opt for a/r factoring.

Truth – We all know that every business is in need of a regular flow of capital whether it is financially weak or is successful and growing. Operations can never be paused citing the reason like limitation of funds and late payments from clients, and factoring can be the best strategy to bail out businesses from cash-crunch situations.

#2 Myth – Invoice factoring is too expensive.

Truth – As compared to other sources of funds like loans, accounts receivable funding is least expensive. Well, at least a fee of less than 2% can be termed as inexpensive in contrast to huge amounts of interest paid on loans.

#3 Myth – Your customers find out about your accounts receivable loan.

Truth – You can choose to or not to disclose about your receivables funding part to your customers. All you need to do is inform them that a third party would be collecting payments instead of you. And, who would care about your funding sources until their services are not affected.

#4 Myth – It is a burden and needs security

Truth – Unlike bank loans factoring doesn’t add any liability to your system. You get funds against your accounts receivable and not by mortgaging any assets. The best part of factoring is you do not have to worry about your receivables turning to bad debts.

Now, you can look forward to factoring your receivables to get access to funds immediately without any debts. Look out for a reliable invoice factoring company in Miami, Florida to not only support your system but also evaluate the creditworthiness of your clients to secure your business.