How Factoring Helps Your Business Get Through Rough Patches
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How Factoring Can Help Your Business Get Through Rough Patches?

How Factoring Can Help Your Business Get Through Rough Patches?

Regardless of size, industry, or establishment, there’s not a single business in existence that’s immune to financial rough patches. For startups, in particular, statistics show that half will fail within the first four years, and the second most common culprit behind that failure is a lack of money. With the right cash flow strategy, though, you can mitigate your risk of failure and boost your ability to stay afloat during rough patches. 

Why Cash Flow Matters Greatly? 

The problem with invoiced based businesses, such as those in the transportation industry, is that cash flow is directly hitched to your customers paying when and what they’ve agreed to pay. Unfortunately, timely payment isn’t always the case. 

As a small startup, the bulk of your funds are invested in securing your business, inventory, and initial customers, right? You’ve incurred the expense of providing your service or product out of the gate, but you then have to wait weeks, months, or even years to get paid in full for it. 

This payment waiting game can create widespread havoc for any business… 

  • You may be unable to fund the next project until the former one is paid up. 
  • You may not be able to pay existing workers and/or hire new workers. 
  • You may not be able to afford your overhead expenses, such as rent and utilities. 
  • You may not be able to restock your inventory. 
  • You may not be able to fund your marketing efforts. 
  • You may not be able to invest in software and hardware to help your business run smoothly. 

The bottom line influences your survival now and your future growth. Plus, your hands become tied in remaining competitive with your competition when you’re waiting to always fund your next moves. 

Factored Invoices Is A Cash Flow Solution 

Business factoring can help ease the cash flow burden so many small and new businesses face as they wait for invoices to get paid. It offers predictable, reliable, and immediate cash flow so that you can fund today’s hardship and plan for a better tomorrow. 

What’s involved? You take a portion of your accounts receivables and sell them to a partnering factoring company. Minus a small fee, you’ll get paid now for those invoices. No waiting. All billing and collection tasks for those invoices is now the company’s responsibility, which leaves you free to focus on obtaining new clients, not collecting from those you’ve already served. 

There’s No Added Debt From Factored Invoices 

Many businesses turn to traditional lenders when they run into a cash flow problem. It’s a viable option if you have the time to find and wait for a loan payout. Of course, you also have to be willing to assume more debt, have the credit to secure that debt, and have a plan on how to pay that debt off whilst still funding your business’s growth. It’s tricky, right? 

Factored invoices allow you to circumvent debt. It’s quick, easy, and convenient to factor your invoices, and, since it’s a buy/sell versus a loan, there’s no more debt going on your books. You simply yield a fraction of the invoice’s amount owed in exchange for an immediate payout on it. 

Your business/personal credit is almost irrelevant because companies that factor invoices are most concerned with the credit of the person on the invoice, not the business that sold to them. You get the financial relief you need without taking on more liability. 

The overall financial health of your business is improved, too. Should you need a traditional loan for a major investment, your books and credit are cleaner and healthier thanks to factored invoices freeing up space. 

Factored Invoices Can Give You A Competitive Edge 

Business factoring is also a way to stay ahead in the competition game. While your competitors are waiting for clients to pay so they can start new projects and fund new marketing campaigns, you’ve already got the cash flow to fund all your endeavors. Now, you can make solid financial plans and investments in your growth. 

It also gives you an edge when it comes to payment terms. More consumer-friendly terms that allow lengthier payment conditions is a big attraction point for your brand, and the backing of factoring makes it far less risky to do. 

Factored Invoices Free Up Your Time 

Your focus should be on attracting and securing new clients and providing the best customer service experience possible. Chase leads. Secure new talent. Build your brand. What you don’t want to be doing is wasting time trying to secure payments on goods and services already through the end of your sales funnel. 

Because most agreements include back office services, you won’t be tied down with tedious tasks like financial reporting, credit checks and approvals, and processing and collecting. 

Are You Ready To Solve Your Cash Flow Problems The Smart, Debt-Free Way? 

Don’t limit your transportation business to traditional funding options with unfavorable terms that may hurt your business in the long game. Don’t wait for weeks to get your money in the form of a debt that adds burden to your business. Don’t worry about how your business’s credit will influence its ability to get cash now. 

Our convenient debt-free factoring programs provide you with the funds you need in as little as 24 hours. We encourage you to check out our invoice factoring learning center to learn more about our services and how they can help your business.

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