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Article: Benefits of Factoring Invoices

Factoring is designed to help companies that have cash flow problems due to slow-paying clients. If you want to learn more about how factoring works, read “What is Invoice Factoring?

Factoring has a number of advantages over conventional forms of business financing. Here is a list of the most important advantages.

#1 Improves cash flow

The most important advantage that factoring financing provides is improved cash flow. By accelerating your revenues, factoring helps ensure that you have cash on hand to cover important business expenses, such as payroll and vendor payments.

#2 Allows you to extend net-30 terms to customers

Invoice factoring allows you to offer net-30 payment terms to customers without having to worry about cash flow problems. You can always finance an invoice if you need funds. When used correctly, factoring helps you take on new clients and grow your business.

#3 Easier to obtain than business loans

Factoring is easier to obtain than a business loan and has a simple application process. The most important requirement is to have clients with good commercial credit. Actually, small companies whose greatest asset is a roster of good clients can usually qualify.

#4 Can be deployed quickly

You can usually get your first invoice financed within a couple of days. Subsequent invoices can be financed either the same day or the next business day.

#5 The line grows with your business

Factoring is tied to your sales, and your facility adapts to them. Your line grows automatically, as your sales grow, provided your company meets the financing criteria.

#6 Perfect for small businesses

Most invoice factoring companies are happy to work with small business owners and offer lines with no minimums. In fact, many businesses use invoice financing as a stepping-stone so that they can later qualify for other types of business financing.

# 7 Minimizes bad debt

A factoring company can act as a credit bureau and provide advice regarding the credit quality of your customers. This service can be critical if you are pursuing new business opportunities but are uncertain of the prospect’s credit quality.

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We are a leading factoring company and can provide you with a competitive proposal. We offer high advances at low rates. For more information, get an instant quote or call us toll-free at (877) 300 3258.