Regardless of the type of business you’re in, this flat economy is affecting everyone. Customers are cutting back their spending, clients are taking longer to pay their bills, and banks and financial institutions aren’t lending. As a result of this downward cycle, you may find yourself struggling with cash flow, which may in turn cause you to not pay your own vendors on time.
Invoice factoring is an alternative yet long-trusted option to get funds right away in order to bolster your cash flow. This way, you will have enough money on-hand to pay your bills, cover payroll and even go after that new investment or equipment purchase.
Factoring Services Work to Help Improve Cash Flow
A factoring company will buy the bulk value of your invoices — up to 96% of their value — and send you the money in less than 48 hours in most cases. Factoring services only look at the value of the invoices as well as the client; no lengthy credit check for your business is needed. Small business factoring is a great way for startups to get the quick cash they need for rapid expansion or staffing, though large and small businesses alike can benefit from the fast turnaround time of invoice factoring.
Secure Equipment Leasing/Financing with Factoring Services
If you’re a business who needs to move quickly on a purchase, equipment leasing or equipment financing, but you have low cash flow, invoice factoring can solve your problem. Delaying on obtaining needed equipment for your business is a risky move that could put your whole business operations in jeopardy. Equipment leasing/financing with a factoring service lets you get your money right away so you can go ahead and get the supplies you need to sustain your company.
Purchase Order Financing for Those in Manufacturing
Those in the manufacturing sector can take advantage of purchase order financing, which has the added benefit of covering the cost of the manufacturing process, including shipping from the factory. This way, there is no slow down along each phase of the manufacturing. Everyone gets their due amount at the end of the financing process once the invoice has been paid. Purchase order financing is common when manufacturing in China.
Having solid cash flow is a sure way to maintain the long-term health of your business, and you can do this by keeping an eye on your books and expenses. Even asking customers when you can expect payment goes a long way in getting paid on time. But if cash flow is low, you don’t have to sit around and wait by the mailbox for that check to come in. Invoice factoring lets you take control of your cash flow issues so you can move forward and focus on your business.