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Invoice Factoring for Food and Beverage
Many food and beverage companies face a major challenge to their growth: having the capital on hand to do what you need to do to grow your business. The food and beverage industry is especially susceptible to this issue, as these businesses frequently have several large invoices that they’re waiting on, and their ability to grow in the meantime can be stymied. Bank loans and lines of credit establish debt and bills, creating headaches, and many businesses may not qualify for them. Even if they do qualify, the process can be time consuming and tedious. Thankfully, many food and beverage companies have found the answer to these problems lies in invoice factoring.
What is Invoice Factoring for Food and Beverage?
Invoice factoring is a business service whereby a company sells its invoices or receivables to a factoring company. The factoring company will provide an initial funding of those invoices, usually 80-95% of the invoice’s value, and then will pay the rest, minus their discount rate, once the invoice is paid. The result is that you get your cash now and don’t have to wait to get the capital needed to grow your business.
Benefits of Invoice Factoring for Food and Beverage Companies
Food and beverage firms can benefit from invoice factoring in a number of ways. The first is that invoice factoring provides liquid capital when you need it. You can use the money to buy more supplies, hire more labor, purchase equipment, secure production or storage space, or anything else that your growing business needs. There’s no restrictions on what you can use the cash for, which means you’re in charge of your business.
Additionally, invoice factoring checks the credit of your clients, rather than your business. This makes it ideal for companies that haven’t been open long enough to have an established credit history, or those that have had credit issues in the past. Therefore, invoice factoring can allow any business to grow and thrive.
Finally, invoice factoring doesn’t show as debt, because it isn’t. This makes the bookkeeping process easy, and provides companies with a way to centralize and consolidate many services like collections. As a result, you’ll have more time to develop new products or brands, and enhance other core business processes.
As you can see, invoice factoring provides a great solution to many food and beverage companies that don’t have the capital they need to grow. If your food and beverage company is stuck in a rut waiting for clients to pay, try invoice factoring today!