Over the last few decades, tighter bank lending requirements have left many companies with fewer options for financing. Factoring companies, with their less restrictive entry requirements for accounts receivable financing (AR financing) and their additional customer benefits, are now filling a crucial funding gap in the market.
Growing your business, creating jobs and contributing to the economy requires working capital. Many companies are struggling to grow their businesses because borrowing funds has become increasingly difficult. According to a survey by the Federal Reserve Bank of New York, the majority of businesses cite “access to capital” as one of the top roadblocks in establishing and growing their businesses. One funding option that is gaining traction in the business community is factoring. Here are some of the main differences between accounts receivable factoring programs and bank loans:
|Bank loans||Accounts receivable financing programs|
To learn more about AR financing vs bank loans, take the next step!
Bank Loan or AR Financing? You Decide
Growing your business requires working capital. In the old days, borrowing from a bank was the answer, but tighter lending requirements have changed all that.
Now business owners have options, including accounts receivable financing programs.
Let’s compare these two funding sources:
Bank Loans have a long approval process
AR Financing has a short approval process
Bank Loans require collateral
AR Financing does not require collateral
Bank Loans requires a strong credit history
AR Financing does not require good credit
Bank Loans you incur debt
AR Financing is not a loan so NO debt is incurred
Bank loans don’t come with additional benefits
AR financing provides value-added services such as credit checks, collections services, recordkeeping and optional invoice preparation
Interstate Capital has nearly 25 years of experience helping companies speed up their cash flow through accounts receivable financing.