One of the best ways of beating a cash flow squeeze, and overcoming the constant problem of slow-paying customers, is to sell off some or all of your business invoices to factoring companies. Factoring can provide you with immediate funding, as opposed to waiting 30, 60, or 90 days for an invoice to be paid.
Here are some of the ways that factoring can be highly beneficial to your business.
Quick funding
As mentioned above, factoring can put money in your hands within just a few days, rather than waiting two or three months for customers to pay off their invoices. Once you’ve sold invoices to a factoring company, it becomes the responsibility of that factor to collect on the invoice, and you don’t have to bother with all those reminders sent to customers.
High approval rates
As opposed to trying to secure a traditional bank loan, you have a much better chance of being approved for factoring. Banks must look at your credit-worthiness and your total business operations, whereas alternative lenders involved in factoring are more concerned with how promptly your customers pay their invoices. This is true even if your company has very little business history to show, because as long as you have good-paying customers, you’re likely to be approved for factoring.
No billing or collections
When you’ve sold off most of your invoices, that means you don’t have to bother with sending out notices to customers, or perhaps calling them on the phone requesting payments. That all becomes the responsibility of the factoring company which purchased your invoices. This means that you can have your company employees devote their valuable time to more useful processes to the business, and you may even be able to trim down your workforce, because collections personnel are no longer needed.
Factoring with Elevation Financial
If your company is experiencing a bit of a cash squeeze, factoring just might be the answer for you. Contact us at Elevation Financial, to find out if factoring will work for your company, and can supply you with the business funding you need.