Why would a Company Assign their Accounts Receivable as Collateral for a Loan?
Many businesses have capital demands that, if met, would increase their profitability. Other companies might have recurring cash-flow problems and often can’t afford to wait 30, 60, 90, or even 120 days for invoice payments. Demand for capital to meet the immediate financial requirements of a business is a common struggle for owners. Assigning invoices to Gateway provides a mechanism to help meet these capital demands. Upon assigning the invoices, a business may obtain funding the same day. Then, when the invoices pay, this creates additional “availability,” which the borrower is free to take. Interest is charged at the end of the month, and only on the average daily balance of the actual funds borrowed. To discuss the various ways that a revolving Line of Credit from Gateway can help your business, please call us toll free at 800-377-9730.
