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Why Turn to Invoice Factoring?

It’s true. Invoice factoring is probably not the first place companies turn to when they need financing. They may turn to a term business loan at their local bank or maybe even use their credit card. Yet as factoring receivables continue to grow, more and more businesses are taking advantage of their fast-cash, turn-around service in this stagnant economy.

Solve Cash-flow Concerns with Receivable Factoring

Time to turn to invoice factoringIt’s no secret that clients are paying their bills late as times are tough for just about everyone. Cash flow shortcomings can be the downfall of even a growing business because without the financial means to sustain operations, your business will cease to exist. Cash flow issues are one of the main reasons businesses turn to factoring accounts receivables. With a regular, dependable infusion of cash every month from an invoice factoring company, you can rest easy and have confidence in the sustainability of your business operations.

Factoring Accounts Receivable Pairs Well with Rapid Growth “Issues”

It is true that a lot of businesses may pine for a situation in which they can barely keep pace with their fast-growing business. Yet not managing the complicated finances involved in fast business growth has the potential to halt that progress just as quickly. If you are unable to cover payroll of swathes of new employees, fulfill large customer orders, or purchase new production equipment to meet this demand, you are at risk of losing those customers. Fortunately, the process of accounts receivable factoring is based on expediency so you can get your money fast enabling you to keep pace with the fast rate of growth.

Startup Businesses Choose Business Invoice Factoring

Getting a term small business loan from a corporate bank when you are a startup small business seems to get more and more difficult despite efforts from the Small Business Association. Many banks want you to have extensive assets and collateral, five years of business history, and a solid credit rating. The underwriting process for these loans is extensive and it can take weeks before you know whether or not you’ll even get your money.

According to Forbes.com, recognizing the difficulty of securing such a loan, more and more startups are choosing alternative financing options such as factoring services. With account receivables factoring, you do not have to run a credit check our put down your home for collateral. invoice factoring works by purchasing your current invoices and then giving you the money right away, minus an agreed upon interest rate for the process. The factoring company then collects on those invoices in the same way you normally would, within the usual 30- or 60-day window. In addition, this cash infusion from Receivable Factoring often fits well with the sort of payments startup small businesses need to keep their businesses going those crucial early years.

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About the Author:

Since 1991 I specialize in Invoice Factoring, PO financing and ABL facilities. I currently work internationally with companies in the US and Canada via our internet marketing division. Specialties: Accounts Receivable Factoring and Payroll Funding for Manufacturing, Oil & Gas, Telecommunications, Wholesale Trade Distribution, Staffing and Transportation. I always enjoy helping companies rise to the next level of success.

View More Posts By Robert Bernfeld