Small Business Invoice Factoring

January 9, 2019

Running a successful small business takes time and money. For many small business owners, having enough time to focus on growing the business has a direct connection to having consistent cash. That’s why so many business owners use invoice factoring to finance their day to day operations.

What is Small Business Invoice Factoring?

Invoice factoring is a type of business finance in which a company sells its invoices to a factoring company for an immediate cash advance. Invoice factoring, also known as invoice financing, provides business owners steady cash flow without the long wait for customer payments.

Small business invoice factoring is not a loan, therefore no new or additional debt is added to a company’s bottom line. The cost of factoring is determined by the factoring rates. Rates vary depending on the volume of invoices financed and length of time it takes for the invoice to be paid.

Why Do Small Businesses Use Invoice Factoring?

Companies providing goods or services to other businesses often do so on payment terms of net 30 or longer. Businesses using factoring get immediate cash for their invoices, eliminating the long and frustrating wait for customer payment. The cash from factoring can be used to meet payroll, manage expenses, or fund growth.

Invoice factoring is an excellent financing option for small business operators because factoring programs and rates are based on the credit and payment history of the business customers, not the business. This makes factoring an ideal source of financing for start-up companies or businesses working to build a solid financial foundation.

How to Get Started with Invoice Factoring

There are many factoring companies to choose from. However, choosing the right factoring company for a small business is not complicated. When researching factoring companies, ask about their working experience with companies in situations, industries, and profiles as your own. Talk with factoring company representatives and get a consultation on advance rates, factoring fees, and all associated services offered.

Scale Funding has provided invoice factoring to small businesses since 1994. We offer month to month factoring programs for companies with monthly invoicing volumes from $50,000 – $20,000,000.  Companies from a variety of industries such as transportation, temporary staffing, oilfield services, and many others use our services to cash flow their operations.

For a free, no-obligation factoring consultation and quote, complete the web form, or call 800-707-4845.