--- title: AR Finance - What it is. How it works description: What is AR Finance? How AR Financing Works and How Online Finance Company Fast A/R Funding can help. image: https://www.fastarfunding.com/hs-fs/file-16070634-jpg/images/work-at-home-for-money-300x291.jpg --- [![Fastar Funding](https://www.fastarfunding.com/hs-fs/file-218610728-png/images/logo.png "Fastar Funding")](https://www.fastarfunding.com/home) 888.833.2286 [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2141336189.png)](https://www.fastarfunding.com/CMS/UI/Modules/BizBlogger/rss.aspx?moduleid=512111) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2141336184.png)](http://www.facebook.com/pages/Fast+AR+Funding/172996222734685) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2138208508.png)](https://twitter.com/FactorInvoices) [![](https://www.fastarfunding.com/hs-fs/hub/96000/file-2138208503.png)](http://www.linkedin.com/company/2138452) - [News](https://fastarfunding.hs-sites.com/news) - [Request A Demo](https://www.fastarfunding.com/free-demo-invoice-factoring/) - [Blog](https://fastarfunding.hs-sites.com/blog-factoring) - [Client Login](https://rbcclients.profitstars.com/Login.aspx) [![1be0951f-93ed-45a1-9a60-d60ea667b7cc](https://www.fastarfunding.com/hs-fs/file-2138208518-png/Images1/1be0951f-93ed-45a1-9a60-d60ea667b7cc.png)](http://cta-service-cms2.hubspot.com/cs/c/?&cta_guid=acec70fa-1f9b-445e-9f32-e0b80e73aa58&placement_guid=33d1a5de-e9d3-4f6f-8217-3669d9d01eb5&portal_id=96000&redirect_url=xzz4snd4oPGFx9zl8sEfJ82iKo44s7GlzVEE4GKN0itY1gzxilxEzZG3ijxUDMTP5RCZwQ5PPKU%3D&iv=oZmCNhUtx9o%3D&hsutk=&canon=&__hstc=231982080.6182d4e598874499a19afc1fb7f5ebf0.1416987541327.1416987541327.1416987541327.1&__hssc=231982080.1.1416987541327&__hsfp=2334472877) ## [AR Finance - What it is. How it works](https://www.fastarfunding.com/blog-factoring/bid/64670/AR-Finance-What-it-is-How-it-works) Posted by [matthew begley](https://www.fastarfunding.com/blog-factoring/author/matthew-begley) on Mon, Aug 22, 2011 - [Tweet](https://twitter.com/share) ![ar finance, ar financing, ar factoring, ar loans](https://www.fastarfunding.com/hs-fs/file-16070634-jpg/images/work-at-home-for-money-300x291.jpg)AR Finance is a kind of short term financing used by companies that do business with other businesses. The term AR is an abbreviation for Accounts Receivable.   AR financing has many derivations but generally involves the sale or pledging as collateral the accounts receivable of a business in exchange for cash.  The AR finance company charges a fee based on two things: 1. The time it takes to collect the Accounts Receivable 2. The amount of Accounts Receivable purchased or lent against. The benefit for the company selling the receivable is that they are able to monetize their investment in invoices due from their customers now, instead of having to wait until the invoice becomes due to be paid.   Example: - $100,000 in Accounts Receivable due in 45 days - 80% Advance rate against Accounts Receivable  - $80,000 Cash available to the business today Fast A/R Funding is different in that by utilizing the latest technology available we are able to keep our overhead lower then our competitors, thus allowing us to be more flexible with the terms of our contracts with our clients. Because our system is paperless we are able to be extremely responsive to our clients.  When you combine our paperless system with our flexible terms we are able to deliver a AR Finance product to our clients that is second to none. We don't have, monthly maintenance fees, factoring minimums or long term contracts.  We believe that if we deliver a superior product our clients will be more than happy to stay with us for the long term. To learn more about our paperless AR Finance program for small business click the button below. 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