Though some sectors have a steady flow of business, others have a cyclical flow of business in peaks and valleys. The manufacturing sector, which involves global entities and numerous parts working together for the production of salable merchandise, tends to be the latter. Those in manufacturing know these high and lows can cause a number of financial challenges related to cash flow, particularly covering the gap between paying for production and collecting on goods sold.
Cash Flow Gaps in Manufacturing Make Invoice Factoring the Go-to Choice
This predictable gap makes invoice factoring a great match for the manufacturing sector. Even manufacturing companies in the black regularly confront these gap cash shortages due to the nature of the business. In fact account receivables factoring was historically used for the manufacturing (textile and clothing) sector in part to account for this often unavoidable gap.
Meet Seasonal Production Demands with Factoring Services
Manufacturing factoring is a proven, effective method for these businesses to get cash quick to cover these gaps in order to continue production. From factory overhead to covering payroll for assemblers and from shipping costs to raw materials procurement, the manufacturing process involves a number of components working together to produce goods on schedule. Manufacturing invoice factoring can help with cash flow, as well as with payroll in order to hire more workers to meet increased production demands. Factoring receivables can also be used to cover the costs of new equipment purchases, factory expansions, seasonal staff increases and more.
The History Between Manufacturing and Factoring Invoices Is Long
When you work with an invoice factoring company, they are extremely familiar with the struggles manufacturing companies face since account receivables factoring and manufacturing have a long history of working well together. Manufacturing factoring companies will review your existing invoices to assess their quality and provide you with the cash you need within 48 hours so that you can move forward with your business. With an invoice factoring company, no extensive paperwork or credit checks is necessary. It is even common for many businesses in manufacturing to get on a rhythm with an invoice factoring company to regularly cover these stop gaps.