FAQ’s – Accounts Receivable Financing

What is Accounts Receivable (A/R) Financing?

Accounts Receivable Financing, also known as ARF or A/R Funding, is a form of cash advance that is based on a company’s accounts receivable. This form of advance sells a company’s A/R to a third party at a discount. These kinds of advances are done so that businesses won’t have to worry about waiting months on end for a payment.

What kind of companies do well with ARF?

Temporary staffing, freight, transportation, wholesalers, IT consulting, manufacturing, distribution groups, and service providers all can get A/R Funding. Realistically, any business that sells items and  products on terms are likely eligible.

How much can I get?

A typical advance will give you anywhere from 70% to 90% of your A/R.

What happens with the rest of the advance? We will give you the remainder of the 10% to 30%, minus our fee and interest taken out, once the A/R has been paid by the company.

How much does this cost?

We do not charge any application fee, nor do we charge any processing fees. The fees that we do charge come at the approval and decision to go forward with the ARF, and these will vary depending on the size of your loan, the business you’re in, your industry, as well as the seasonality of your business. These fees are disclosed at the time of your loan approval.

What size businesses do you serve?

Most of our clients range from $10,000 to $25 million in monthly sales.

What factors into whether or not I qualify?

Three big things will factor into lenders’ decisions. These three factors are your customers’ credit worthiness, your dilution percentage, and the number of clients that your A/R depends on.

Are there any location restrictions?

We serve all 50 states, and your customers can come from any state in the union. International clients aren’t considered to be safe for this form of funding.

How long does my company have to be in business in order to qualify?

Time in business doesn’t matter as much as the kind of A/R you’ve managed to pull in. We’ve even funded startups in the past.

Do I have to finance all my invoices?

Nope. Picking and choosing is fine, and at times, advisable.

How long does this form of financing last?

Usually, it’s a 24 month commitment, but we can tailor it to your needs.

What about collateral?

Your receivables are all the collateral ARF needs. There’s no need for additional collateral.

Do I need an attorney’s assistance?

It’s never harmful to speak with an attorney regarding personal and business matters, and often times, it may be the best thing you can do if you think that an attorney’s advice can help you. Although we aren’t a law firm and we cannot provide anyone with any legal advice, you are more than welcome to speak with an attorney that we use for our company. We truly want to get familiar with our clients, and help them in any way we can. Simply send an email to info@thecreditexpress.org and we’ll be sure to forward it.

Still need help?  If you have a question that isn’t answered here, or if you feel like you could use advice when it comes to the best route of financing for your business, we are here to help you make the best choice for your company!  You may call us at (678) 983-4555 or email: info@thecreditexpress.org.  You’re also more than welcome to visit our office.  Evening and weekend appointments are available.