We understand that farming is an expensive and complex business. There is much more involved than most people realize to grow and provide fresh farm food at local stores. From farmers, to harvesting equipment, to the seeds, to shipping and much more, there are numerous facets that your agribusiness relies on.
Many people take for granted how produce can be grown in one part of the country and purchased at a local market in another area. Yet, we know that farming today requires working together with several different entities and is a complex process.
Why Agriculture Financing?
Farming and agriculture have a difficult time finding financing, as it is seen as a slim margin, seasonal business. Yet, to have your agribusiness run smoothly, financing is often needed. Another reason why factoring is the best solution for agribusinesses is because banks don’t typically won’t give loans due to the risk factor. Even though it is a complex process to finance agribusinesses with governmental regulations and laws, factoring companies are willing to offer financing solutions. This involves accounts receivable financing that helps these businesses receive the capital they need to operate and grow. If you are interested in agriculture factoring, take a look at a few benefits below.
1. Quick Means Of Cash
If you are in the agriculture business, you know that expediency is key. Delivering produce on time is crucial to ensure that it remains fresh and doesn’t perish. To avoid spoiled crops your need for speed is non-negotiable. With agriculture financing, you can get the money you need quickly. Accounts receivable financing is known for its speed. The application process can be completed within a couple of hours and you can receive money within a few days after approval.
2. Meet Payroll Needs
Through accounts receivable financing, you can receive the money you need to make sure that your business can pay your employees whether you are paying growers, shippers, etc.
3. Repair or Replace Equipment
Repairing or replacing equipment can be expensive, especially if you are strapped for cash or have an unstable cash flow.
4. Stock Up On Supplies
Another benefit of factoring is that you can use the money to stock up on supplies. It always pays to think ahead and stay on top of your game.
Why Agriculture Factoring Is Better Than Loans
Not only are farm equipment loans hard to receive, they also take a long time to process. With factoring, you will receive the money you need much quicker. Agriculture factoring is the option that many farmers, distributors, and packers tend to choose. With factoring, it’s your customers’ credit history that determines financing, not your FICO score, which loans required.
How It Works
It’s actually a really simple process, even if you think it may seem complicated. First, you send your unpaid invoices, and then once you get a quick approval, the factoring company will purchase your outstanding invoices. You will receive up to 96% of the invoice within 24 hours.
Factoring companies understand agribusiness and can help them find the financing they need. Whether you know a lot about factoring, or a little, we would be happy to answer any questions you may have.