What Is Accounts Receivable Financing?

Ever seen those commercials where they offer to turn your annuity into a cash lump sum? That’s more or less what accounts receivable financing (ARPO) is, only better.

Yeah, I’ve seen those ads on TV. They seem kind of sketchy.

They do, don’t they. Well, they probably are. But ARPO isn’t. Basically, accounts receivable financing allows you to shorten the time it takes for you to get paid for a fee. Sick of waiting 30 days to get money from people who owe you? Or did something come up that you need to pay for now, but your money is tied up in invoices that will come through a month later? ARPO is probably for you.

Yeah, I’m always waiting on payments!

We understand. So listen up:

Benefits of accounts receivable financing:

  • Typically low interest rates
  • Drastically decreases time-to-payment
  • Enables you to borrow up to 80% of your accounts receivable

 

Pitfalls of ARPO:

  • Customers may prefer to deal directly with you
  • Requires accounts receivable as collateral

 

Wait, customers won’t be dealing with me anymore?

The simple answer is no. You take a loan out on your outstanding invoices, and the lender pays you. The lender then contacts your customers and collects the money directly from them. While some customers may prefer to deal with you directly, it could provide an ideal solution for your problem. Especially when you consider that your loan term can be up to 12 months, you can get funded in around a week, and it takes the hassle out of following up on that long list of receivables.

That’s interesting. I would have never guessed that existed.

Well, we can’t take the credit. We didn’t invent it, we just make it accessible. So get going on that application and turn your 30-year annuity into a lump sum today!

Wait, what?

Er, sorry. We get confused sometimes. So many words, so little time. Just fill out the application. Our funding managers will help you with the rest.