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Accounts Receivable Financing

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Turn unpaid invoices into capital. Accounts receivable financing is a funding option that uses your company’s outstanding invoices as collateral for a lump sum of cash. Financing these accounts receivables gives your business faster access to capital and more predictable cash flow.

Example of Accounts Receivable Financing: A manufacturer received an order from a shoe store chain for $50,000 worth of shoes. Included with the order terms is the requirement that the transaction carries 60-day payment terms for the shoe store chain.

The manufacturer recognized that while the $50,000 order is a positive for their business, the 60-day payment terms will create a significant cash flow challenge. Rather than opting to wait for payment, the shoe manufacturer sells their invoice to MCCI to accelerate cash flow. In buying the invoice, MCCI advances 80% of the invoice value - $40,000 - to the manufacturer immediately upon delivery of the shoes. Sixty (60) days later, when the shoe store chain pays the invoice, the remaining 20% of the invoice value (less finance processing fees) is advanced to the manufacturer. In this example, where a $50,000 invoice is outstanding for 60 days, the total finance processing fees come to $1,950.

Contact Anthony Rust at 401-575-1024 or anthony.rust@mccinvest.org for more information.

Details

  • Amount: $100,000+

  • Your loan is based almost exclusively on the credit quality of your customers

  • Current Rate: 1.50% to 2.20% per invoice per month

  • For businesses with $200,000+ annual revenues seeking to bridge the cash flow gap to address payroll and other expenses