Older invoices? Factoring Can Help!
Do you have clients that take 45 to 60 days to pay their invoices? We know how difficult that can be on your cash flow; especially for new and growing companies. Waiting to receive payment for your invoices can wreck havoc on your company’s finances.
Most business owners try to solve this problem by going to a bank to get a line of credit. However in this economy, banks are being very conservative and getting a loan can be difficult. This is where factoring can help.
Factoring is a powerful financial tool that has fueled the growth and success of numerous businesses. Factoring enables companies to capitalize on their unpaid receivables by selling them to a factoring company for immediate payment.
Factoring eliminates the 45-60 day wait and gets your invoices paid in as little as 2 days. Giving you the immediate financing needed for expenses such as payroll, rent and supplier payments.
Factoring is a very simple and easy process:
• Invoice your client and sell the invoice to the factoring company
• The factoring company advances you the first payment of 70% to 90% of the invoice
• The factoring company waits to get paid by the client
• Once paid, the factoring company provides you with the second payment, the remaining 10%- to 30% called the rebate (less a small fee)
Even if your bank couldn’t provide a loan, you can still be approved for factoring. Banks and factors use very different criteria for financing. Factors look at the potential in a new contract, the strength of your invoices, and your opportunity for growth. Businesses owners find that a factor will often provide working capital for growth when the bank can not. Factoring is an excellent way to grow your business without incurring debt.
The Factoring Alliance LLC provides factoring services to small businesses and start-up companies. Please contact Kim Deveney at 888-493-3666 kim@thefactoringalliance.com for more information.