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Accounts Receivable Financing: How a Bank Supports Your Business

October 10, 2023

If you’re a small business owner, you understand that managing your company’s cash flow is paramount to its success. One of the biggest challenges to cash flow management is waiting weeks – or even months – for customers to remit payments for unpaid invoices.

One financial tool that may help you improve liquidity is accounts receivable financing. Learn more about this Accounts Receivable solution, and how Texas Gulf Bank can help you on the path to regaining control of your cash flow.

What is Accounts Receivable Financing?

Accounts Receivable Financing, also known as Invoice Financing, is a lending option that allows a company to obtain a business loan using eligible outstanding invoices as collateral.

To qualify for funding, your business must demonstrate both a high quality and value of accounts receivable invoices, plus customer reliability and a strong credit history. If approved, the bank advances a percentage of the eligible invoice amounts.

Advances are in the form of a bank loan. You repay the advance plus accrued interest as customers pay their invoices but retain control of collecting payments and customer interactions.

Funds from Accounts Receivable (AR) financing can be used for various business needs, such as working capital, payroll, or a business expansion while you wait for your customers to pay their invoices.

Companies that gain the most from choosing AR financing include small businesses and seasonal businesses with irregular cash flow. AR financing may provide the influx of cash needed when businesses have substantial invoices due but lack the assets to secure capital from other loan types.

Benefits of Accounts Receivable Financing 

Choosing accounts receivable financing can offer significant benefits to businesses in need of short-term financing options, including:

  • Improved cash flow
  • Invoice ownership
  • Steady payment options
  • Funding flexibility

With Account Receivable Financing, your business gains a predictable source of working capital, and you have the flexibility to use those funds in a variety of ways to strengthen your business. In addition, your business retains ownership of customer invoices, allowing you to maintain your business relationship.

Accounts Receivable Financing: Work With Texas Gulf Bank

Accounts receivable financing is a valuable solution for businesses seeking to enhance their cash flow. Texas Gulf Bank is here to help you navigate your financing options and identify a solution that fits your company’s unique situation.

Our experienced lending team and Treasury Management Department can provide guidance on how to identify a financial solution that aligns with your business objectives. We can also help you get started on applying for accounts receivable financing for your company.

Don’t let cash flow challenges hinder your business’s growth and success. Contact Texas Gulf Bank today to get started on accounts receivable financing. Working together, you can take the first step toward securing a brighter financial future for your business.

All Loans Subject to Credit Approval.

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