Why Your Business Needs an Invoice Factoring Company
Have you been searching all over the Internet for the best ways to finance your business or get the cash flow you need? All business owners understand that cash flow is the lifeblood of a company and is necessary for it to stay alive. Yet, sometimes that cash flow dries up when you’re waiting on invoices to be paid and you’re left in a lurch. In these situations you most likely need money fast. That is why many business owners turn to invoice factoring.
With a factoring company you can get the cash you need in a quick, convenient and efficient way. Invoice factoring is a popular option for risk-free funding. Take a look below at a few reasons why many businesses choose to use a factoring company for gaining the cash flow they need to make payroll, expand, and much more.
1. Quick Approval Process
One of the most noticeable benefits of invoice factoring is the easy process. Once an invoice is submitted to the factoring company and is approved, the company can receive an advance of up to 96% on the invoice within 24 hours.
2. Wide Range of Businesses Accepted
A factoring company can help a wide range of industries. Essentially, any business that has invoices may quality for factoring. Several of these industries include agriculture, manufacturing, retail, oil and gas, technology, transportation, and much more.
3. Variety of Types of Invoice Factoring
One of the many benefits of choosing a factoring company is their wide range of invoice factoring. If you are unsure which type of factoring is for you, take a look at the different types. Once you have decided, make sure that the factoring company you choose has the one you want. Several types of invoice factoring that you may want to choose include:
- Non-recourse factoring
- Small business factoring
- Payroll funding
- Recourse financing
- Spot factoring
- Credit card factoring
4. Good Credit Not Required
A huge benefit that many business owners appreciate about invoice factoring is the fact that there is no credit check on the business required. If you have bad credit you can still be approved for factoring since it isn’t a loan. The factoring company may not run a credit check on your business; however, they will most likely look into the companies or entities that are responsible to pay back the invoice.
5. Helps You Work Your Way Out of Debt
Another advantage of invoice factoring is that it is a debt-free transaction. Unlike a loan from a bank, invoice factoring is a purchase transaction rather than a loan. This means that once the factoring company buys the invoice, you no longer have to worry about it or pay it off. You get the money from an advance right away and the rest after the client pays the invoice off.
6. Invoice Factoring Is Typically Risk-Free
Depending on the type of invoice factoring you receive, it can be a risk-free transaction. Generally, if you want to be sure that the type of factoring you choose is risk-free then you will want to go with non-recourse factoring. With this type of factoring you can be sure that you won’t have to buy the invoice back if the client defaults. This way you can be confident that you will be financially secure.