Ledgered Line
A ledgered line of credit, also referred to as a receivables line of credit, is an excellent choice for temporary placement staffing agencies. It offers numerous advantages similar to those of a traditional bank line. However, it does not have the restrictions that can hinder a company’s growth if a financial covenant is not met during a review of recent financial statements or an audit. A ledgered line of credit imposes no such limitations.
Here are some of the advantages:
- No long application
- No complicated forms
- No audit requirements
- No restrictive financial requirements
- No restrictive covenants
- No financial ratio requirements
- No concentration restrictions
- Plus other benefits
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Step Away From Rigid Requirements
This option is well-suited for companies contemplating a traditional line of credit or those currently utilizing asset-based lending or a bank line. It enables them to step away from rigid requirements while still reaping the advantages of a line of credit and competitive pricing.
The line is flexible and secured by the company's accounts receivable. Unlike a traditional line of credit, this option does not require audits or impose restrictive covenants related to ratios, concentration, and other factors.
Manage The Cost of Funding Effectively
The pricing structure is similar to that of an Asset-Based Lending (ABL) line, typically comprising a prime rate plus a percentage, in addition to a competitive service fee. This service fee is charged monthly based on the total gross amount of invoices. Interest is applied only to the funds that have been drawn, which helps manage the cost of funding effectively.
Simple Process
The process is simple: the company submits invoices, creates a pool or borrowing base, and then draws up to 90% depending on the advance rate. The client can draw funds daily, weekly, bi-weekly, or monthly. Funding is based on the value of your receivables, providing constant capital based on sales. The ledgered line is structured to fit the funding needs of the client.
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