Invoice Factoring in Toronto

As a business centre, Toronto has always been a hub for business growth and new business creation. It has a heavy concentration of companies in high-growth sectors like transportation, manufacturing, and technology. A number of these companies are growing quickly and, because of that, need business financing.

The challenge

Most businesses seeking financing often look for a line of credit or a business loan – the two most common products used to finance business. Unfortunately, they are also the hardest to get.

For example, to get a line of credit, your company must have assets that can be used as collateral, a solid balance sheet, a growing income statement, and a two- to three-year track record of success. Meeting these requirements can be difficult for small companies – or even for larger, growing companies.

However, a line of credit is not the only way to solve financial problems – especially if you have cash flow problems because of slow-paying commercial clients.

The most common financial problem

The most common cash flow problem occurs because companies have to sell their products/services to commercial customers on credit terms. These terms give the customer up to 60 days to pay invoices.

The problem is that few small or mid-sized companies have the financial wherewithal to afford to wait that long for payment. They need the funds sooner to be able to cover their own business expenses. This problem can be fixed easily by using invoice factoring.

Solving the problem

Factoring solves this problem in a simple way. This solution provides an advance on your open invoices, which gives you the liquidity you need. It provides benefits similar to getting quick-payments from customers, without actually requiring customers to pay any sooner. Most transactions are structured using a factoring company that funds your invoices and settles when your clients pay.

Simple transactions

The finance company advances funds to your company as soon as the work is completed and accepted by your client. Most factoring companies advance up to 85% of the invoice, based on your industry and risk profile. They also settle the transaction once your client pays, on their usual schedule. The settlement covers the remaining 15%, less the funding fee. You can learn more about factoring by reading “What is Factoring?” and “How does factoring work?

Qualification

Factoring financing is easier to qualify for than most conventional funding solutions. Your company must have a strong roster of customers. This requirement is critical because you are leveraging the commercial creditworthiness of your customers to your advantage. Additionally, your company should have unencumbered receivables, be free of legal and tax problems, and be well run. An account can usually be set up in less than ten days, and subsequent funding can be done in as little as one business day.

Supports growth

Invoice factoring in Ontario is available to small companies and can work in most industries. The line is indexed to your sales, through your invoices, and can increase as your sales grow. This flexibility can be a powerful feature for companies that are going through a period of strong growth and need quick funding. It also makes invoice financing a unique solution and an invaluable tool for growing companies that have financial challenges due to slow-paying customers.

Why work with us?

We have offices in Toronto and are a leading provider of factoring and purchase order financing in Canada. We believe that our customers should be able to make informed decisions, which is why we have one of the most comprehensive sites about factoring in Canada.

Get more information

We are a leading factoring company in Canada with offices in Toronto and can provide competitive quotes. For information, get an online quote or call (877) 300 3258.