(For immediate release) Miami, Florida – Businesses that need financing can now depend on factoring their invoices as a source of steady working capital. One of the greatest challenges for small to mid-sized companies is waiting up to 60 days to get invoices paid. Factoring invoices fixes that problem and provides capital immediately after invoicing, enabling business owners to easily pay salaries and suppliers.
Obtaining business financing has always been challenging for business owners. Business loans have traditionally been hard to get. Furthermore, business loans often prove inflexible for the needs of growing businesses. For that reason, a factoring company can often help your business more than a bank can. Receivables factoring financing is easy to obtain and can be set up in a few days.
Accounts receivable factoring works as follows:
- Your company delivers the goods/services and invoices the client
- The factoring company advances you the first financing installment of 70% to 90% of the invoice
- You get immediate use of the cash
- Once your client pays the invoice, the factor provides you with the second installment (the remaining 10% to 30%), less a small factoring fee
Factoring works for most industries where the payer is another business. Factoring also has a number of industry subspecialties: truck drivers and freight brokers can use freight bill factoring; construction subcontractors can use construction factoring; healthcare providers can used medical factoring. Any other type of business does well with general invoice factoring.
The most interesting feature of receivables factoring is that the factoring company is buying your invoices. Since they own the invoice, their primary concern is that the payer (your client) is creditworthy. This aspect of factoring is important because it also means that a new business with a roster of strong, creditworthy customers can easily obtain factoring, since its chief assets are its invoices. Factoring is truly a product that allows you to leverage the financial strength of your customers.
Return to the press release area.
Previous release: Freight Broker Factoring
Next release: Medical Factoring: a New Financing Alternative