Factoring, also referred to as invoice factoring or accounts receivable financing, is a flexible financing option businesses use to obtain steady cash flow. Instead of waiting to get paid, factoring provides you with working capital on your open invoices. So, when should you start factoring? Below are the top five reasons companies factor their invoices.
Are you waiting weeks or even months for customer payment? Could you use the money today, that is tied up in your accounts receivables? Invoice factoring eliminates the wait on slow-paying customers by paying you immediately on your open invoices.
With factoring, you’ll have a reliable stream of cash. Once you send your invoices to the factoring company, you’ll get an advance right away, providing your business with steady cash flow.
If you’re growing quicker than cash is coming in and need working capital to hire more employees, get more equipment, or invest in new resources, factoring can provide you with working capital to grow.
With factoring, approvals are based on your customers’ credit rather than yours. This gives companies with no credit, less-than-perfect credit, or maxed-out credit the ability to get working capital when the bank says no.
Most small businesses have a lean back office. Small business owners know the headaches of running an organization, filing papers, maintaining records, and collection of invoices. Many times, there aren’t enough resources to effectively handle all of the back-office functions of a business.
Top factoring companies provide several other services in addition to just factoring invoices. For example, TCI Business Capital provides extra support services including free credit checks on your customers, AR management, and online reporting.
If you can relate to any of the reasons listed above, it is time for you to start factoring.
To get started, just fill out the form below or give us a call at 800-707-4845. We’ll get you a no-obligation quote and an approval to get you on your path to steady cash flow.