What is the cheapest way to finance/float A/R for a company similar to a credit card company, but B2B, and 100% insured?

What are some inside and outside the box options? Just need the money to float the A/R coming in and if it doesn't come in it's insured for payment.

What's the cheapest money out there - types & rates?

Also, if this is up your ally please contact me via PM.

$6 Million out at any given point and growing - are we talking a LIBOR+ rate?

Cheapest is a bank line of credit. But that requires formal credit approval which means a good, thorough credit analysis involving past years financials and personal creditworthiness.

Next cheapest is a factor, who will take over your AR and collect it. They pay you a percentage of your AR when you generate a sale, within a few days. They will charge you between 5% and 15% depending on how risky your AR is.

So I've been researching on Libor + 1% and sometimes less which would obviously be lower than 5%. Of course you have to qualify, but what am I missing? This is a credit card type business (think low margins), but 100% insured.

Still risky. Banks are regulated, so they have standards measured by examiners.

A banks response would be, "if there is zero risk, then you wouldn't have a problem showing me healthy profits and margins. In fact you shouldn't need too much financing if you were generating cash on zero risk, despite the float time."

Tried to PM you, but not sure if it went through

You wouldn't be in Austin would you?

Sent you PM

I'm a commercial lender in Frisco. What Bonfire said is correct, full underwriting, personal guarantees for the business, ongoing monitoring, etc.

Rate depends on risk. Part of that risk involves the hassle of collecting on the insurance for non-payments and also how often non-payments have occurred in the past.

I'm happy to talk with you to see if a proposal is in order. If you're interested, i'll put up my email address. Sorry no stars for a PM, I have a 14 month old son.

Thanks.