As a business owner, it can be very frustrating having to wait on customer payments, especially those who pay in 30, 60, or 90-day terms. These extended payment cycles can weigh heavily on your cash flow needs. As a result, it easy to fall behind on covering expenses such as, meeting payroll, paying bills, and purchasing equipment and supplies.
Businesses need to have money available to operate and succeed. Invoice factoring companies are an excellent source of consistent cash flow for small and mid-size companies. Factoring supplies the cash businesses use to meet payroll, manage expenses, and grow.
Invoice factoring, also referred to as accounts receivable factoring, is an alternative to traditional bank financing. Instead of getting a loan or line of credit, businesses with customers that pay on extended terms, sell their invoices to a factoring company, and receive an immediate cash advance. This simple transaction provides money that is used as needed.
Working with an invoice factoring company is a quick and painless process. It first begins with an agreement between a business and the factoring company. The business completes its work and generates an invoice as usual. Rather than the business sending the invoice to its customer, the invoices go to the factoring company. From there, the factoring company purchases the invoice and directly deposits the advance into the business’s bank account within 24 hours or less. Generally, the advance is around 90 percent. Once the end customer pays the invoice, the factoring company pays the remaining balance, less a small fee. Use the invoice factoring calculator to learn more about how much a factoring company charges.
Many companies cannot afford to wait for payments from customers that pay in terms of net 30 days, net 60 days, or net 90 days. Factoring eliminates the worry and stress of these long payment terms by paying the client immediately on their invoices.
Factoring companies are an excellent alternative source of financing because they provide businesses cash quickly. Setting up an account with a factoring company can be done quickly and easily, enabling company owners to focus on running their business.
All invoice factoring companies supply cash to their clients. What separates one from another is the advances, factoring rates, contracts, and services each offer. When choosing a factoring company here are some considerations to keep in mind.
Since 1994 TCI Business Capital has served companies in the United States with factoring programs customized to fit the specific needs of each client. We are rated one of the best factoring companies in the United States, because we provide funding to businesses in 24 hours or less, along with superior customer service. Our factoring lines range from $50,000 to $10MM, giving businesses flexibility and room for growth. For a free, no-obligation consultation and factoring quote, complete the form below, or call (800) 707-4845.
Learn more about invoice factoring and factoring companies from TCI Business Capital.