Accounts Receivable Financing

WHO CAN BENEFIT FROM ACCOUNTS RECEIVABLE FINANCING:

  • Companies with cash flow challenges due to the lag time between cash outlays (such as payroll and payments to vendors) and cash receipts from invoices to customers.
  • Companies that don’t qualify for traditional bank financing or don’t qualify for ENOUGH bank financing.
  • Companies with limited trade credit with vendors.
  • Companies needing capital to fund growth opportunities.

BENEFITS OF ACCOUNTS RECEIVABLE FINANCING:

FASTER CASH FLOW

Accounts Receivable Financing (also known as Factoring) is an excellent way for companies to speed up their cash flow.

With Accounts Receivable Financing, Applied Capital advances 70% - 90% of the Face Amount of your eligible Accounts Receivable immediately upon our verification of the invoices to your customers. Instead of waiting 30 - 90 days to get paid by your customer, you get immediate cash. Now, you have turned “money that you are always waiting for” into cash in your bank account right now.

INCREASED WORKING CAPITAL

Since most businesses always have unpaid invoices out to their customers, if you can turn unpaid invoices into immediate cash through Accounts Receivable Financing, you increase the working capital in your business. You don’t just get money sooner, you get more working capital.

Also, as this additional capital is put to work in your business, your Accounts Receivable will increase. Now you automatically qualify for increased funding amounts from Applied Capital (i.e., 70%-90% of the increased Accounts Receivable amount). Unlike a bank line of credit, you do not need to wait until the end of the year to see if you qualify for increased funding.

PREDICTABLE CASH FLOW

Taking the guess work out of estimates on when your customers will pay allows for more predictable cash flow and more accurate business planning.

TRADE CREDIT DISCOUNTS

The additional working capital provided by Account Receivable Financing allows you to take advantage of early payment discounts from your vendors.

INCREASED SALES AND NET INCOME

More working capital employed in your business will allow you to take advantage of growth opportunities. Increased sales will result in increased Net Income. A typical small business with (1) a 60% cost of goods, (2) a 20% of revenue administrative cost, (3) a 10% of revenue marketing cost, (4) a collection period of 45 days on its invoices to customers, (5) an 80% advance rate on invoices from Accounts Receivable Financing, and (6) a 3% 30-day fee on financed invoices can increase its Net Income by over 60%.

AFFORDABLE FEES WITH NO ADDED DEBT

Since Accounts Receivable Financing is structured as a purchase of your Accounts Receivable, the funding is re-paid when your customer pays the related invoice. There are no loan payments involved.

Financing fees are a function of the credit worthiness of your customers and the amount of funding involved. Fees range from 1.5% - 5% of the Face Amount of invoices funded for a 30-day period.

THE FUNDING PROCESS:

  • Click Apply Now and submit some basic information to us.
  • We will follow up with you to schedule a call to discuss your financing needs in more detail.
  • Immediately after our call, you will receive a proposal by email.
  • You sign the proposal and email it back to us.
  • Only after you have reviewed and agreed to our proposal, do we ask you to complete our Financing Application.
  • Once we receive your Financing Application, we prepare financing agreements for your review and signature.
  • At the same time, we do credit underwriting on your customers and establish credit limits on the amount of funding that will be allocated to each customer.
  • We conduct background checks on the principals of your company.
  • We conduct UCC searches and filings on your company to ensure that your Accounts Receivable are not used as collateral for other financing.
  • You make an introductory call to the customers that will be involved in our financing to let them know that you have assigned your account with them to Applied Capital and that a representative of Applied Capital will be contacting them to verify information on your invoices. You do not need to finance invoices with all of your customers and you do not need to finance all invoices associated with a customer that you are financing.
  • A notification of the assignment of your account with the customer is sent to your customer by Applied Capital. This notification instructs your customer to make payment on your account directly to Applied Capital.
  • You request funding by submitting invoices to us that will be involved with our financing.
  • We verify the invoices with your customers (typically by email).
  • We wire transfer 70%-90% of your verified invoices to you (typically on the same day as the verification is received).
  • When your customer pays the invoice, we deduct the amount that we have advanced to you and our fee and wire transfer the balance to you.

APPLYING FOR FINANCING IS QUICK AND EASY

APPLY NOW