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There are many accounts receivable financing advantages. Businesses the need capital will be hard pressed to find a much better or faster option. Such financing is not dependent upon a businesses’ credit or the length of time that they have been in business. As long as a company has clients with good credit and outstanding invoices, then accounts receivable financing is a viable commercial financing option. Below, we will go into a little more detail about only a few of the many advantages of generating capital in this manner.

Fast money

Accounts receivables financing is a really great way to get money fast. Most factors are able to provide payment for invoices in about 24 hours. This process may initially take more time. However, after a business has established a relationship with a factor, the process goes really quickly. Unless a company has an open line of credit, it is difficult to think of a faster way to raise commercial capital. Even in cases where a line of credit is utilized a company is forced to pay interest which can be extremely expensive. There are no such costs associated with receivables financing.

Easy money

Accounts receivables financing is easy money. When a business desires to get a bank loan, they must be willing to jump through hoops. They will need to have all of their financial documentation in order. For a small business, this might require an unpleasant trip to the accountant. They then must also be ready to answer any questions a bank has. If they are unable to satisfactorily do so, then they won’t qualify for the loan. Also, many banks won’t loan money to new businesses, these are often the companies that need it most.

Today, it is even more difficult then in the past to receive bank financing. Banks simply aren’t willing to part with their money right now. They are turning down loan applications from businesses with good credit and that have been in business for a long time. Commercial financing has become more difficult then ever to secure, though not in every sense. Accounts receivables financing is a pretty easy way to get money. As long as a business has outstanding invoices owned by clients with good credit, they may be able to qualify for monies.

A business credit score doesn’t matter

If a business has any chance of receiving a bank loan, they must have a good credit score. In this day and age, they just might need an excellent credit history with no blemishes. Fortunately, businesses that utilize accounts receivables financing don’t have to worry about this. A factoring company is more concerned about the credit history of the invoiced clients then the company that owns those invoices because that is who they will be collecting their money from.

Whatever your reasons for needing a loan, it almost always a good idea to hire the services of a finance broker. All things considered, a finance broker makes the processes for loan application easier and less tedious. The basic role of finance brokers is to obtain for a client a suitable lender and lending solution. First a broker takes on the task of evaluating the client’s requirements and conditions. The broker needs to understand why the client requires a loan, if it is for personal use or for business funding. From this standpoint the broker will find the most suitable and matching type of loan for the client.

Their role may seem to be done in just three easy steps. However, if the entire responsibilities of finance brokers are be studied more closely, the three steps will nevertheless multiply into numerous detailed actions.

Once a finance broker is appointed by a client to act as the mediator, the broker should first and foremost inform the lender or credit provider that it is working for the benefits of a client, that a client has hired its services in order to obtain a loan or financial product. This may either be done formally through writing when deemed necessary.

As an entity entrusted by the client, the finance broker should perform a responsible and competent performance of its duties. Aside from competence and responsibility, the finance broker should also execute all its actions in an honest and upright manner. Every step and procedure must be done carefully and skillfully. The broker also has an obligation to the credit provider which includes prevention of interest conflict and maintain discretion of the lender’s information and lending processes. The broker also needs to comply with the lender’s policies. All records complying to the law governing the financial lending must be kept by the broker.

In order to find the most suitable type of loan for the client, the broker needs to properly assess and evaluate if the borrower or the client can indeed repay the loan and meet monthly loan obligations. If deemed possible the broker will hold interviews to guarantee the client’s financial ability.

A broker’s role entails those processes concerning applications and contracts of loans. As an intermediary, it is the broker’s role to provide the lender with all the loan’s required documents and information. The information mostly provided are personal or business identity of the borrower, financial position and ability and credit history of the borrower. The financial broker must provide the client with copies of correspondences about approvals, finance offers, contracts and other related and important documentation.

Should there be any variations in the client’s requirements, it is the duty of the broker to relay and convey this to the credit provider. If there are variations in the requirements of the lender, the finance broker should also make this known to the client or borrower.

They must also double check of the client’s requirements are indeed met by the lender’s credit facility. This is to ensure that the best interest of the client who has hired the broker in the first place.