No matter the size of your business, it is crucial to have a good standing credit score. With good credit, your business will have more opportunities for financing, taking on partners, growth, and so much more.
We see many businesses, both big and small, that have let their outstanding invoices get the best of their cash flow and their credit score. When you are constantly waiting for invoices to be completed, your cash flow dwindles more and more, making it harder and harder to complete monthly payments. Poor cash flow can hinder your ability to make payments on time, complete projects for your clients, and ultimately kill your credit score.
3 Ways an Invoice Factoring Company Can Help Combat Bad Credit
Thankfully, there’s a way you can combat cash flow issues and increase your credit score—invoice factoring. With invoice factoring, a factoring company will step in and purchase your outstanding invoices to advance you up to 96% of its amount in just 24 hours or less. With this, your business can experience the following benefits that will help you improve your credit score:
1. Have a Flawless Payment History
Typically, your business will have to wait anywhere from 30 to 60 days to receive payment on outstanding invoices. This keeps your business from making payments to suppliers, vendors, and paying other monthly costs. This often results in endless late fees and final notices that are killing your businesses credit and reputation.
When you partner with an invoice factoring company, you will be able to get instant access to the funds owed to your business—without the risk. With invoice factoring, your business will be able to get immediate payment to ensure that bills and other costs are paid on time and in full.
2. Gain More Trust with Vendors & Suppliers
A good business is built on good relationships. When you have constant late payments between your business and suppliers, they tend to not trust you and don’t want to work with your business. Paying your invoices on time, or even ahead of time will allow you to build stronger relationships with your partners. This can result in better offers or even discounts.
3. Get Instant Access To Working Capital Without Incurring Debt
With invoice factoring, your business will have access to its working capital without taking on any additional debt. This allows your business to skip the lengthy application process, wait time, and costly fees of a business loan from a bank. With invoice factoring, you sell your invoices for a 96% cash advance. In return, the factoring company takes on the task of collecting the remaining funds owed from each invoice. If your client fails to complete payment on these invoices, they will be responsible for repayment—a major benefit for your business.
Partnering with an Invoice Factoring Company
Getting started with a company is quite simple. You simply send your invoices to the factoring company for approval and get paid within 24 hours. When you partner with an invoice factoring company, you can start securing cash for your business to improve your poor credit and grow it larger than you ever thought possible.