Rapid business growth is sometimes called the curse of getting what you wish for. After all, you want growth for your business but too much of it at once can actually cause your business to collapse under its own weight.
If you are unprepared, cash flow issues can become a major business problem in that you have invoices coming in but no actual cash itself to sustain business operations or even required expansion. When production fails to meet demands and client contracts go unfulfilled, unhappy customers can become a business’s undoing. Some may in fact look elsewhere if you are unable to deliver as promised on a product or service.
Victim of Your Own Success? A Factoring Company Can Help
Fortunately, there are numerous financial options available to businesses that need cash fast to deal with cash flow issues due to rapid growth. Invoice factoring, also called account receivables factoring, is a process by which a business puts up its current invoices for collateral so that it can collect on them right away rather than wait for the 30- or 45-day due date. If you need to invest money in your company to meet rapid growth demands, you can’t afford to wait. And with factoring services, you don’t need to.
Factoring Receivables & Rapid Growth Make a Great Pair
Those who are unfamiliar with the process of factoring invoices may think it is expensive, time-consuming or complicating. Actually, factoring receivables is simpler than it sounds. You can get your money in less than 48 hours instead of a bank that may make you wait several weeks. Invoice factoring is ideal for companies experiencing rapid growth because invoice factoring services are based on expediency. Those huge orders you’re getting can be used immediately as collateral when working with a reputable factoring company.
Though it can vary on the amount of money you need and your company’s situation, invoice factoring generally costs 3-5% of the total value amount you are seeking with ongoing interest rates until your unpaid invoices are collected. So you get between 97-95% of the money you are seeking right away, money you can use to put back in your business to fulfill those new orders and have happy, repeat customers.
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