Accounts receivable loans are loans taken out to provide working capital for a small business, with its accounts receivable (invoices sent out to clients for goods or services rendered) as collateral. Depending on the ages of the various accounts receivable invoices, a company can usually borrow between 60 and 75 percent of their total value. Older accounts receivable invoices are considered higher risks (the older they are, the less likely they are to be repaid) and so are worth less. Some lenders will not loan on accounts receivable invoices that are over 90 days old.
Accounts receivable loans are short-term loans, repaid as the company collects the accounts receivable from their clients. Unlike accounts receivable factoring/funding, the business still maintains ownership of the accounts receivable and is responsible for collecting them on time and making payments on time.
Obtaining Accounts Receivable Loans Companies that take out accounts receivable financing must be established enough to have amassed a fair amount of assets in the form of accounts receivable, as well as be able to know that their clients will indeed pay their invoices. Such a transaction is not suited for budding businesses, or businesses looking to expand and branch out. Accounts receivable loans work best to provide working capital for ordinary day-to-day expenses, such as equipment or rent.
Registering with www.ibank.com allows a small business to negotiate an accounts receivable loan quickly and conveniently, pick from a variety of lenders with competitive rates, and get funding faster so that business can continue as usual.
