About Lesson
Invoice financing
If you sell products or a service, you likely send bills to your customers. These bills, also called invoices, can be turned into cash through a lender. This practice of invoice financing is a loan based on your accounts receivable, so if you don’t make many sales, you won’t be able to borrow much. Fortunately, the lender can make a safe bet on whether they can get paid, so it’s an ideal choice for newer businesses with good revenue projections but not a full two years’ of business records. Invoice financing is one of the more expensive small business loan types out there, so be sure to read your contract carefully. Some lenders will expect you to make monthly payments based on your agreement, while others may take over the process of collecting from your customers. If you want to keep full control of how your customers are billed and collected from, you’ll likely want to avoid this second option.