Factoring companies are an excellent source of 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.
Invoice factoring begins when a business completes its work and generates an invoice. Rather than sending the invoice to it’s customer, the company sends the invoices 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.
All invoice factoring companies supply cash to their clients. What separates one from another are 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.