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Invoice Factoring for Technology Companies
Any tech company can tell you that one of the greatest challenges they face every day is making sure they have the cash on hand they need to grow their business. Tech is a start-up rich environment, and many companies won’t have the history or qualifications for other forms of funding like loans or business lines of credit. Thankfully, many savvy tech company managers and owners have found a solution: invoice factoring. This guide will explain what invoice factoring is and how it can help tech businesses.
What is Invoice Factoring for Technology Businesses
Invoice factoring is a business service whereby a company buys your receivable invoices and gives you an initial funding based on their value. The initial funding offered ranges from 80-95%, and you’ll get the rest of the value of the invoice, minus a small discount rate, once your customers pay. As a result, it’s a great way to make sure your tech firm has the cash on hand o do what it needs to do in order to grow and thrive in a crowded marketplace.
Benefits of Invoice Factoring for Technology Companies
Invoice factoring offers many benefits to tech companies. The first and clearest example is that invoice factoring makes sure your business has the cash on hand to grow and start new projects when you want to, rather than waiting for customers to pay their invoice to you. Many companies wait until the last minute to pay an invoice, leaving your tech firm in a lurch if you need liquid capital now but don’t have enough on hand.
Invoice factoring also benefits tech companies because of the seed with which most companies provide funding. Many invoice factoring firms provide your money in less than 24 hours, so you’ll have the money you need in case you need to hire new works, expand your office space, or bring on some specialists for a job or project. This means you can take on larger projects faster, confident that you have the working capital you need to keep your business moving.
Finally, invoice factoring also helps because factoring companies check your client’s credit, not yours. This makes factoring ideal for companies that haven’t been around long enough to establish a credit history or meet the arbitrary conditions required to receive a bank loan or business line of credit.
As you can see, invoice factoring is a powerful tool in a business’s arsenal that can be used to ensure you have the capital you need to grow your business when you need it, so say goodbye to missed opportunities!
