Tag Archives: capital

account receivable funding

Account receivable funding or better known as factoring is the instrument for getting the working capital by selling the invoice or account receivable for the service and product that has been rendered. Although it is very useful this kind of instrument is not really familiar among business because most of the businessmen are not familiar with this kind of instrument, most of them do not know how this kind of instrument works.

Account receivable funding is generally suitable for small to middle size of companies because they have the special characteristic that do not have much collateral but they have not developed any established relationship with any bank. Moreover account receivable funding is useful for the company that would like to expanding and developing their operating capital. The next benefit that you can get from factoring is that it can increase the working capital since it can improve the company’s profit, enables the businessmen to get the discount from purchasing some goods, and it helps the businessmen to evade from the high interest and penalties.