Turn Your Invoices Into Cash Today
Quick Funding (24 hours)
Low Fees
Free Application
How Invoice Factoring Works
Improve your cash flow by converting your unpaid invoices to cash
Select a Customer Invoice to Sell
Get up to 90% of the Value of Your Invoice
Receive the Remaining Balance minus the Factoring Fee when the Invoice is Paid
Are you considering a traditional business loan but aren’t sure it’s right for your funding needs?
Invoice factoring, also known as Accounts Receivable Financing, provides an alternative solution with a long list of benefits regardless of why you’re seeking extra cash.
Factoring works differently from most other loan types. Instead of borrowing a given amount from a lender and paying it back over time, you sell your invoices to a bank or another third party and receive 70 to 85 percent of the total value up front. The remainder, minus interest and fees, is forwarded after customers pay the invoices.
10 Reasons Why Your Company Needs Invoice Factoring
If you need cash but are wary of taking out a traditional loan, consider these ten perks of Accounts Receivable Financing.
1. Maintain a Reliable Cash Flow
All invoices have a payment period, but sometimes you can’t wait for customers to make good. Waiting can get especially worrisome if customers tend not to pay until the last minute and you need cash before the due dates for invoices roll around. Factoring gets you money when you need it so that you don’t have to rely on your customers’ timing.
2. Keep Up with Payroll
A slow season can cause stress for everyone in the company, including employees who expect their paychecks to continue arriving on a routine schedule. Invoices can be factored to cover payroll costs and maintain the stability employees need to feel comfortable in their jobs until sales pick up again.
3. Support Steady Growth
Financial challenges can hold you back from meeting the goals you set at the beginning of every year. Cash from invoice factoring provides funds to invest back into the business so that you stay on track. You can also get the money you need to take advantage of unexpected growth opportunities in which you wouldn’t be able to invest without a quick influx of funds.
4. Make Upgrades
Higher quality products and services mean happier customers and higher profits. New equipment allows you to operate your business better than ever before, but investing in machinery or electronics can be cost-prohibitive. Use invoice factoring to upgrade your company and start delivering more of what your customers want.
5. Sustain Production
Fluctuations in manufacturing can create problems when consumer demand exceeds your production abilities. Running out of popular products or constantly having inventory on back order can hurt your company’s reputation and result in loss of sales even when production returns to normal. By factoring invoices, you can keep up with demand and ensure every order is fulfilled on time.
6. Higher Likelihood of Qualifying
Standard loans require a solid credit score, records of consistent income and some form of collateral. Invoices function as security for the loan when factoring, making it a lower-risk option for lenders and allowing them to use more lenient qualification terms.
7. Provides a Mediator
Do you ever get tired of hounding customers for invoice payments? If you factor invoices, this responsibility passes to the lender. Lenders want to get paid, and they’ll make it a point to get money from customers on a reasonable schedule. This means they not only receive the interest and fees to which they’re entitled but also forward cash to you when you need it the most.
8. Stay Out of Debt
Loans, business credit cards and cash advances all require going into debt to receive funds. Selling invoices, however, is simply a way to get early payment of funds you’re already expecting. The only expenses are interest and fees automatically deducted by the lender when invoices are paid. This makes invoice factoring a viable way to help pay down existing debts without digging yourself in deeper.
9. Be Consistent with Marketing
Visibility and brand recognition are critical to staying ahead in a competitive market and require ongoing advertising efforts. Running ad campaigns to consistently engage with customers can be expensive. To ensure you can always invest in fresh brand messaging, consider using invoice factoring to support marketing during slow times.
10. Fast Cash without Shady Deals
Loan options with long lists of “guarantees” and the promise of quick receipt of cash often come with a catch in the form of predatory interest rates or lists of hidden fees. Choosing to factor your invoices brings in money without tethering you to an unscrupulous lender. You can deal with the same bank through which you already handle business finances or use a reputable alternative lender.
From providing better cash flow to offering more potential for growth, invoice factoring can help you meet your business goals. It speeds up an existing payment process without creating a complicated financial situation or threatening your company’s stability. Find a reliable lender, and you can feel secure in using invoice factoring to get the cash you need.
