Yes, there are fees associated with accounts receivable financing through an asset-based lender, but they are generally structured as interest rates or financing fees. Instead of the factoring fees seen in invoice factoring, asset-based lenders typically charge:
- Interest on the loan: This is usually calculated based on the amount of capital you’ve borrowed and the time you hold the advance.
- Origination fees: Some lenders may charge a one-time fee for setting up the financing arrangement.
- Maintenance or service fees: These fees may cover the costs associated with managing the loan, including monitoring your receivables.
The total cost can vary based on things like the size of the loan, the length of the financing agreement, and the risk associated with your business. These fees are typically lower than the fees charged in factoring, and they offer more flexibility in terms of repayment.