• Receivables Financing 

• Inventory Financing

• Equipment Financing 

• Real Estate Financing

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Factoring or Financing Accounts Receivables

If your business deals with customer invoicing, then you may be able to leverage your outstanding customer Accounts Receivables (AR) in exchange for instant financing. Keep in mind though that there is a difference between AR factoring and AR financing. With AR factoring, your business would receive 70-90% of the total value of the outstanding receivable up front, the rate is generally dependent on the age of the account. The factor company would then assume responsibility for collecting the outstanding invoice. Upon full receipt of the payment from the customer, the factor company will return the remaining balance, minus a small processing fee. With AR financing, your business would use its outstanding invoices as collateral for financing, but you would still be responsible for collecting payment from your customers.

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Revenue Based Financing

Similar to business cash advances above, revenue-based financing allows borrowers to get up front funding, usually in the form of a cash advance, and then pay off the amount funded via a monthly allocation of the revenue their business generates. But, unlike the cash advance, a business’ whole revenue stream is considered. While interest rates are again on the higher side, this finance product allows business owners to maintain ownership of their companies while not being forced to borrow against their homes and possessions.

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Purchase Order Financing

Also called inventory financing or PO funding, purchase order financing is a short-term, commercial finance option that provides capital to pay suppliers upfront for products or inventory so the borrowing company doesn’t have to deplete its available working capital. The products or inventory then serve as collateral for the loan if the business does not sell its products or otherwise cannot repay the obligation. Inventory financing is especially useful for businesses that must pay their suppliers within a short payment cycle or a longer period of time than it takes them to sell off their inventory. It also provides a solution to seasonal fluctuations in cash flow and can help a business support a higher sales volume by, for example, allowing a business to purchase bulk orders of inventory to sell later on.

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