One of the greatest liabilities that a company holds is its unpaid invoices. Even though a company may offer a net discount to those who pay early, many customers will choose to delay payment, which can lead a cash crunch for businesses large and small. Fortunately, a company that specializes in business finance options will allow a business owner to borrow against unpaid invoices to help give them the cash needed to operate. Before an entrepreneur applies for an invoice based loan, it is a good idea to understand the process involved. Here is a quick look at what is involved when a company decides to borrow against their outstanding accounts receivables.
Apply For An Account
The first step is to apply for an account. The company providing the funds will conduct a credit check to determine the company’s ability to repay the amount in the future. The company will need access to the company’s EIN number and the latest financial documents. Most applications are processed the same day, and those approved can have access to the money they need in as little as a few hours.
Once the application is approved, the next step is to submit any unpaid invoices to the company. While there is no guarantee that an invoice can be used as collateral, most companies approve nearly 90 percent of all requests. Once the invoices are submitted, they will be reviewed and then either accepted or declined. Invoices are typically evaluated 24 hours a day, and most companies can expect to hear back about an invoice approval in as little as a few hours.
Once the invoices are approved, the payment will be sent to the company’s bank account. Repayment terms are dependent on the amount of the loan, but most require a lump sum payment within a set period, typically 15 days after the due date of the invoice that was used as collateral. This makes it quick and easy for a company to get the cash they need to remain operational when a large number of invoices are outstanding.
To learn more, read it online by checking out Business Factors and Finance. They provide financing options to a wide array of companies and can help any size business stay afloat during tumultuous financial times. Stop by their website today and apply for a free business account to start the process.