Accounts Receivable Financing Loan

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Accounts receivable financing loans are great small business loans if you have outstanding receivables. If your business has offer products or services to a customer and that customer still owes you money, that is an outstanding receivable. If your business is in a tight situation and you need cash, you can use your outstanding receivables as collateral for the loan. Once you start collecting those receivables you can then pay back the loan.

If you have outstanding accounts receivable, you can be approved for a business loan for up to 70% of the total worth of the receivables

If your outstanding accounts receivables are getting to a point where they are 60 plus days late, a lender will see those as not being collected and will not put them towards the worth of your total outstanding receivables. A lender will only lend up to about 70% of your total outstanding accounts receivables. This leaves a little bi of a cushion for the lender in case some of those outstanding receivables never come in.

Accounts receivable financing loans are not to be confused with factoring invoice loans. In a accounts receivable financing loan you, the borrower, are responsible for collecting those receivables from your customers. Once you collect payments from your customers, you can then pay back the loan. In a factoring invoice loan, the lending institution purchases your outstanding accounts receivables and takes on the responsibility of collecting those receivables. You do not ever have to pay this loan back.

There are only a handful of lending institutions that will offer this kind of loan. Try SmallBusinessLoans.com's lender search and find the right accounts receivable financing loan lender for you.