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Invoice Factoring for Agriculture
Agricultural enterprises know that it can be hard to find the operating capital they need to get by. In the modern perishable foods industry the costs related to labor, packaging, shipping, and other core business aspects don’t seem to want to stop climbing. Given these harsh economic realities, it’s no surprise that many agricultural firms look for alternative sources of funds. However, many banks are not interested in lending for agricultural production, and many business line of credit accounts don’t work for the common expenses in the agricultural industry, for example, labor. Given the lack of capital access and higher capital demands, what is a growing agribusiness to do? The answer that many businesses are looking for is invoice factoring.
Invoice factoring is a financial product that allows companies to sell receivables like purchase orders and invoices, receive advance funding, and then receive the rest of the value of their invoice once it is paid by the client. Many factoring services provide funding in 24 hours or less, and businesses can get as much as 99.5% of the value of their invoice once everything is said and done.
Benefits of Invoice Factoring for Agriculture
Invoice factoring provides a number of benefits for agricultural businesses. The first, and most obvious, is a rapid increase in working capital. Agricultural businesses can use this capital to expand and grow, hire more laborers, purchase new equipment, or invest in other business assets. There’s no limit to what you can use your invoice factoring funding for, so you remain in control of your business.
Moreover, invoice factoring is better than loans for many businesses. Unlike a loan, invoice factoring relies in the credit of your clients and purchasers, rather than your business. That makes it a great option for businesses that are too young to receive a bank loan, or don’t have the credit they need to get a loan that makes sense for them. The result is enhanced flexibility, smoother capital acquisition, and less stress and worry.
Finally, invoice factoring provides funding from money you’re already owed. This means that you don’t have to worry about keeping up with loan or bank payments, nor is there a situation where you may have to consider selling a share of your business.
As you can see, invoice factoring provides many outstanding benefits for agricultural businesses that have customers and orders but are in need of working capital. Some factoring companies even specialize in agriculture, so check them out today to get your agricultural business growing!