If you’re looking for a way to maximize your cash flow management without taking on the kind of debt that will affect your debt-to-income ratio if you’re going for a new loan, you need to look at the options available for accounts receivable financing. While credit lines and other reusable resources can offer a business a lot, suddenly taking out a new one can alter the balance of your credit score and make it harder to get approved for loans if you’re mid-process. Financing your receivables means getting an advance on money you are owed instead of a loan you have to repay, and there are other advantages as well.

Most factors, the lenders who provide these advances, will offer you options that make this instrument useful as a kind of insurance on customer payment, as well as an opportunity to outsource your accounts receivable to the extent you like. It’s even possible to use this kind of financing on a regular, rotating basis to cover all your large orders that don’t pay upon receipt if you have a good relationship with your lender and healthy financial projections for your business.

You do have to know that most accounts receivable financing programs will charge you more for customers who pay late or who aren’t expected to pay for a longer length of time. The good news is that not all of them do that, so if you’re willing to pay slightly higher fees on customers who pay quickly, you can get a flat rate that also saves you money on the ones who take their time.

Most factors offer their products as non-recourse advances to you, and the standard way of managing repayment involves the lender taking over the collection process, so you can use the money with confidence that your credit will not be affected if your customer winds up being unable to pay for the order. The exact way these policies work is open to interpretation, however, and you’re going to want to make sure you understand the agreement you’re getting into before making assumptions.

The key to really making accounts receivable financing work as a reusable resource is to do the research into lenders that lets you find one with the policies, options, and price structure that best fits your business. Then, you can easily work the predictable costs of financing into quotes when you are pretty sure you’ll be using it, and you won’t have to worry about waiting a long time for your money when you finish the work and deliver your product.