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A Word on Receivables Financing

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A Word on Receivables Financing Powered By Docstoc
					While many businesses scramble to make ends meet through loans, receivables
payment will allow you to receive needed financing sooner than later. Receivables
financing is a term used to describe the process of selling a company’s accounts
receivables to a third party (or investor) while receiving discounted payments for the
said accounts.
  Technically speaking, this form of financing lets a third party assume the
responsibility of collecting whatever payment needed while you get the payments you
need for your business. When a company chooses to undergo this process, they can
get immediate cash infusion because third parties will guarantee payments instead of
the clients that bought your products under certain financing agreements like
postdated checks.
  Furthermore, such financing schemes require little paperwork to complete. A third
party usually looks at invoices, rather than company reports, so you don’t need to wait
long to get an approval. You can get cash immediately, if the third party likes the
products they see on your invoices. Furthermore, this type of financing will not get
you in any debt because it’s not a loan, rather, it’s indirect selling at a discounted price.
Here are other advantages that receivables financing offer.
  Receivable financing eases your worries. As the third party will be the one to assume
payments collection you rid your business of worrying on whether you will get
payment or not. The third party will be the one worrying about this issue because you
pass on this obligation to them when you sold them your company’s invoices.
  You don’t have to worry about your company’s financial standing. Receivable
financing schemes will not delve into your company’s transaction history or its credit
rating. You simply have to agree on payment terms with the third party and your
business is virtually set to receive the payments that it needs.
  Third parties or investors will look closely at your clients rather than your company.
If your client has a good payment history, the third party may immediately consider
you for receivable financing. Remember that third parties tend to focus on almost
everything else but your business, so make sure to organize your invoices because this
is your most important asset.

				
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