Invoice Factoring Solves the “Nice Problem to Have” Dilemma

It’s long been one of businesses most vexing yet common problems: high profits and low cash flow. This dilemma is even more prevalent in this struggling economy when more and more companies may lag on paying their invoices. Being profitable on paper is great, but sufficient cash flow is necessary to both cover your own bills and move quickly on new opportunities.

A recent article in Entrepreneur magazine discusses this ubiquitous dilemma and talks about invoice factoring as a financial option for fast-moving, high growth businesses such as those in construction, freight and transportation, oil and gas, and government contracting.

Equipment Financing for Construction & Freight Industries

Business owners in construction know projects are costly both in terms of purchasing equipment and covering fluctuating payroll. Moreover, they tend to have a peak and valley work cycle rather than a steady, easy-to-forecast flow. A construction financing company understands the nature of your business and can let you immediately obtain a large amount of cash to cover these costs so you don’t have to wait for your invoices to be paid. For those in construction, invoice factoring is a preferred choice.

Freight bill factoring companies know that costs associated with rising fuel costs affect incoming and outgoing funds at every level. Sometimes these rising gas prices are unpredictable and freight factoring can let you get your money right away to cover these price increases and keep your trucks moving.

Government Contract Financing, Oil Field Factoring Helps High Rewards Industries

Oil and gas factoring companies understand that their industry’s “normal” pace is much faster than the pace of standard businesses served by traditional banks. Oil and gas companies cannot sit around and wait for weeks and weeks to secure a line of credit. They must cover sizable payrolls as well as equipment and materials purchases quickly in order to get ahead of the competition and seize the next project. Oil field factoring is a financial option that enables this growth to happen more effectively than standard banks.

Even those companies who work as government contractors know there is a downside to landing a lucrative client. Government contracts are notoriously slow on paperwork with payment moving at the pace of bureaucracy. Fortunately government contract factoring companies are familiar with the lengthy processes and procedures associated with doing business with the government. Government contract financing companies work with these companies to “buy” these invoices from the government giving companies their money right away so they don’t have to delay. Because even a business generating high profits must still pay its own employees and its own expenses on time.

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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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