If you are looking for fast cash flow solutions for your business, factoring your accounts receivables (invoices) can provide you with the funding you need to succeed almost immediately. Invoice Factoring is a financial transaction and type of debtor finance in which a business sells its invoices to a third party (factoring company) at a discount. The factoring company will then collect on the unpaid invoices for you, and once all of your clients have paid, the factor will reimburse you the remaining balance (minus a small fee).
- It can turn your accounts receivable into immediate cash without giving up equity in your business.
- The process is much faster than a conventional loan and is simpler.
- Because your business receives funds up front, it enables you to offer better and more competitive credit terms to your customers.
- By using the cash you receive from factoring your invoices, it enables your business to take advantage of early payment or volume discounts from your vendors.
- It lets you concentrate on growing your own business instead of the Accounts Receivable and Collection process.
- It helps you to begin to build and improve your credit, because your business is able to pay its creditors within terms. You no longer need to wait on customer payments, so that you can pay your bills.
- No new debt – Invoice Factoring is not a loan.
- It helps to get invoices paid faster – Having a professional and experienced company assist you in managing your Accounts Receivable and collections usually shortens the days that invoices remain unpaid.
- Monitoring and early detection of customer service issues – The factoring company can essentially be your outsourced A/R department and can alert you to any potential problems with your customers.
- Receive invoice processing assistance, credit screening & monitoring, as well as professional collections.
If your cash flow is suffering and you are looking for a financing solution that will save you time and money while bringing about all of the above benefits, invoice factoring is for you.
- What Is An Invoice Factoring Broker? - July 17, 2022
- 7 Tips for Buying Out a Business Partner or Majority Owner - May 13, 2022
- 6 Leadership Secrets Every Small Business Owner Should Know - December 9, 2021