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Accounts Receivable financing rates

Accounts Receivable Financing For Small Businesses: 4 Frequently Asked Questions

When it comes to starting and running a successful business, there are hundreds of important aspects that you need to be focusing on. Ensuring fast and flexible funding, however, should be at the very top of your company priority list — that’s where accounts receivable financing comes into play.

Why Choose Accounts Receivable Financing?

From accounts receivable financing rates to invoice factoring for small businesses, here are some important frequently asked questions that should help you and your organization thrive in the near future and further down the line:

1. Why do I need invoice factoring?

You can use the money to purchase inventory, pay various business expenses, hire more experienced staff members, open up new locations, provide vendor discounts, offer credit terms, and so much more. Accounts receivable funding is an important component to business growth.

2. How are accounts receivable financing rates determined?

Your rate will be determined based on a number of items, including your total sales volume and the amount you are factoring; the number of debtors you deal with; and the size and number of invoices, as well as the length of time they are likely to remain outstanding. The costs of invoice factoring are higher than a bank business loan but lower than many online loans or merchant cash advances. 

3. Why get business credit funding?

Since you want to have a good standing business credit, and you certainly don’t want to have a lot of late payments, you can greatly benefit from business credit funding and invoice factoring. Approximately 60% of all invoices are paid late — but you can’t just not have capital as you’re awaiting those late payments. You need funding and need it right away to handle all kinds of organizational expenses.

4. How much money does a small company need when starting a business?

Small businesses are defined as businesses with fewer than 500 employees, which actually account for wholly 99.7% of all organizations across the United States. According to the Wells Fargo Small Business Index, $10,000 is the average amount of startup capital required by a small business owner but that doesn’t include access to working capital funding needed for funding operations during those early months.

Learn More About Accounts Receivable Financing:

If you want to learn more about an accounts receivable financing program and work with a trusted invoice factoring company, give Eagle Business Credit a call right away. Good luck with your small business!