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We specialize in receivables lending for growing companies that do not have access to traditional financing sources. Working with us you gain a financial partner who understands your needs and is vested in your success. Receivables lending is part of a collateralized loan. You simply pledge your accounts receivable to a lender and receive up to 90% advance. This type of loan is a revolving line of credit that fluctuates with the amount of open accounts receivable.
There are many benefits to this type of receivables loan:
- Your cash flow is directly tie to your sales and as your business grows so will the available
capital. - You will receive the working capital you need without giving up equity.
- Bridge the gap between your invoices and collection.
- Receive cash within days of generating an invoice.
- Gives you the confidence to fulfil larger contracts.
We work with many well-capitalized lenders that are aggressively lending. Many of our clients, companies just like yours, can receive the working capital they need even in today’s hard economic times.
Turn your receivables into cash NOW, and gain the working capital and the peace of mind your company needs to succeed.
Book a Call Now Or call us at 561-299-1609
$15,000,000
Receivables Loan for
a Manufacturing Plant
$25,000,000
Receivables Lending for
Warehouse and Distribution
$2,500,000
Accounts Receivable Funding for
Industrial Testing
$4,000,000
Receivables Finance for
Bottling Facility
How does it work?
Accounts receivable funding is typically the main component of an asset based loan and generates the most working capital. Lender prefers accounts receivable over other assets because it is the easiest asset to convert to cash.
Accounts receivable is the first collateral item on a borrowing base certificate. A borrowing base certificate is a form that a borrower submits to the lender on a schedule basis, usually monthly or weekly, which indicates the current value of the collateral assets and the amount outstanding. The borrower must provide backup documentation including an accounts receivable aging, accounts payable aging and financial statements when submitting borrowing base certificates. Lenders typically do quarterly audits to verify the information being submitted.
Borrowers can expect to have an 80% – 90% advance rate on the accounts receivable funding portion of an asset based loan. The advance date will be based on a few different factors including the average amount dilution or returns the company has had historically, the age of the receivables and the credit worthiness of the customers. Receivables are usually considered ‘eligible’ to borrow against until they are 90 days old. Lenders will look at the credit worthiness of the individual customers and exclude any customer balances if they think the risk of non-payment is high.
Why Receivables Finance can be a great tool of funding certain businesses, there are some restrictions that borrowers need to be aware of. Lenders may impose debt-service-ratios to make sure the borrower has enough cash to cover debt payments. Other restrictions may prevent owners from taking distributions, etc.
Many lenders will restrict the amount of funding on other assets such as inventory or equipment to a percentage of the total accounts receivable. Some lenders will impose ‘concentration’ restrictions on accounts receivable to limit funding on any one customer to only 25% of the total receivables.
Accounts receivable funding is the most important aspect of an asset based loan and generates the most cash. Accounts receivable is the first asset that a company should consider leveraging when generating working capital.
Book a Call Now Or call us at 561-299-1609