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3 Reasons Why Semiconductor Manufacturers Need Factoring

Over the past few decades, the semiconductor industry has grown tremendously to the point where running a manufacturing company has become very popular. In its earliest days, there were very few companies in this industry. Now, semiconductors are the foundation of our current way of life.

What is a Semiconductor?

A semiconductor is a component that allows an amplified electrical current to move along a circuit board, which can power multiple elements on that board. The development and production of the semiconductor was one of the gateways for technology such as processors and memory chips, which have completely revolutionized modern technology.

As the push for smaller and smaller devices has come into light, the more semiconductor manufacturers have begun to sprout up. Although you may think that these companies have strong financial backbones because of the high demand, these companies often struggle. Here are 3 reasons why semiconductor manufacturers should utilize the many benefits of non-recourse manufacturing factoring.

1. Research is Expensive

Just like in any business, in order for semiconductor manufacturers to get ahead of each other, there needs to be a competitive advantage. In order to have a competitive advantage, there needs to be a great deal of research and development that goes into making a semiconductor better than the leading model.

Innovation and research are ongoing, and costly. The equipment that scientists require to advance the technology of semiconductors is exceedingly expensive. For manufacturing companies that want to stay ahead, they need to have a strong source of capital and cash flow for research projects. With non-recourse manufacturing factoring, your business will be able to do so.

With factoring, a factoring company purchases your outstanding receivables or invoices to advance up to 96% of the amount with low rates. This allows you to have access to the money owed to your business right away, rather than waiting 30 days, or longer, for invoices to be paid and processed.

2. The Need for Semiconductors is Expanding

As technology continues to advance, the need for smaller, and better, semiconductors continues to expand. As more and more small semiconductors are produced, the more we see them in just about every appliance. In the past, you typically only found semiconductors in televisions and radios. Today, we see them in everything from toasters to desk lamps. Now, you can assume that anything that has a printed circuit board will most likely operate from a semiconductor.

The need for semiconductors expands every year. By utilizing factoring, this allows manufacturing business to stay ahead of the game. With a strong source of working capital, manufacturing businesses will be able to easily take on more clients, fulfill more orders, and expand their business to become in line with major competitors.

3. The Semiconductor Manufacturing Industry is Growing

As you may know, with growth comes financial struggles. The semiconductor industry is facing major growth that has business owners struggling to keep up with demand. Although this problem is one that many businesses would love to have, it can still have a negative impact on the business. As you take on more and more clients, the more need there is for your semiconductors.

If you are constantly waiting for payments from customers, you will never be able to catch up to their demand. With factoring, you will be able to get immediate cash for your outstanding invoices and receivables. In just 24 hours or less, the factoring company will process and advance up to 96% of the amount to help you secure a strong source of capital. This will allow you to take on more clients and keep current ones happy with ease.

As the semiconductor manufacturing industry continues to grow every year, there are more and more manufacturing businesses that join the race. By utilizing the many benefits of manufacturing factoring, you will be able to grow your business, advance your products, and take on more clients easier than ever before.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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