Nations Interbanc provides Accounts Receivable (A/R) financing, or invoice factoring, to our clients. It is a relatively straight forward model in which we advance our clients money against their invoices, typically advancing 80-85% within 24 hours, then pay our clients the remaining 15%-20% (less our fee) once their customers pay us on these invoices. For SaaS companies, Nations Interbanc also provides advances against a company’s future monthly recurring revenue (MRR).
While A/R financing is more expensive than traditional Bank lines of credit, for many companies – especially start-ups and fast growing technology and digital/social media companies – it is a good option to consider. Many companies have trouble getting traditional bank financing due to balance sheet concerns, a company’s length of time in business and/or due to the Bank’s requirement for a company to show profitability over a number of years. Nations Interbanc is an ideal “bridge” financing solution for these companies to help them solve their short term cash flow needs, while at the same time positioning them for the long term to qualify for other traditional Bank financing options.
The A/R financing facility we provide is very flexible by design – we have no monthly minimums nor do we have annual “minimum use” or admin fees for keeping the facility open. Only use our financing solution when you need the cash infusion.
Relative to selling equity in your company to raise short term capital, A/R financing is good option to consider. The quicker you can grow your revenues and the longer you can delay going out to investors for additional funding, the more valuable your company will be and the less dilutive this future capital raise will be to the founders and existing investors.
Loans made or arranged pursuant to the California Financing Law, License 603L155