The business recovers the working capital with the advance and receives profits from the remainder of the advance and all of the rebate payments. One primary difference between this type of financing and asset based financing is the due diligence requirement for approval. Approval for this type of financing is based largely upon the credit worthiness of the customer list for the business. The approval process can be completed within 2 to 14 day s rather than the 1 to 3 months required for loan applications. Businesses with good and dependable customers can apply for Accounts Receivable Financing .
Most businesses qualify.
Profitability for those businesses can jump in quantum leaps . All businesses that offer credit to their business customers have accounts receivable and they wait for the customer to pay the bill. When the accounts receivable becomes a major part of the working capital available for the business a greater problem often arises, i.e. a shortage of cash needed for the next business transaction. Businesses use this type of financing primarily to reduce the working capital requirement and to enhance growth. Venture Capital Financing Venture capital firms simply do not lend money to a business as a bank would.