Accounts receivable financing, or Factoring, is the purchase of accounts receivable invoices at a discount. If you sell your products or services to businesses that pay in 30, 60, 90 days or more, Jemworks Financial has a liquidity solution for you. We can arrange financing for small and medium sized businesses nationwide.
Account receivable financing leverages the value of an existing asset to enhance the liquidity of that asset. This is not a “debt.” You are essentially selling an asset. But it is more than that; it is like outsourcing your accounts receivable department. Accounts Receivable purchasers, known as Factors, provide valuable services. They check your customers’ credit for you and notify you of bad risks and they provide detailed monthly statements. Qualifying accounts even get free credit insurance.
Accounts Receivable Financing and Factoring is a simple process. The lender will advance you between 70% and 90% of the amount of the invoice. For example you could receive 80% of the outstanding invoice(s) you choose to finance on the day you bill. When your customers pay their invoices you will receive the remaining 20%, less any interest charges.
Companies that are start-ups, losing money, or in bankruptcy can take advantage of accounts receivable financing because financing is based on your customer’s credit, not yours.