Business owners, both large and small, can sometimes struggle with business growth. Managing cash flow and getting access to working capital can be difficult when a business is unprepared. Invoice financing, however, is the perfect solution to help grow a business. Invoice factoring is the process of a business selling their accounts receivables to an invoice factoring company to get a cash advance quickly, typically within 24 hours, instead of waiting for the client’s lengthy payment terms.
We have put together the top reasons for how invoice financing can help grow your business. Keep reading to see why it might be the perfect fit for your business.
Invoice financing improved your business’s cash flow
Invoice financing, also known as accounts receivable financing, is a type of business financing that provides you with immediate cash for your unpaid invoices. Not waiting for clients to pay invoices at the end of their payment terms, around 90 days, allows you to stay on top of your products and services, pay all expenses, expand your business, or purchase new real estate. Your business incurs no debt when using invoice financing, and therefore it doesn’t affect your credit score. There is a small factoring fee when using it as a financing option.
Invoice factoring is an affordable option
Unlike getting a loan from a bank or traditional lender, there is nothing to pay back when using invoice financing, and there is no interest rate. The only thing you pay is a factoring fee per invoice, which makes invoice factoring an affordable financing option for your business. The factoring fee will always be the same once you sign the contract, and you’ll know the amount upfront. You can also choose which invoices and how many invoices you want to factor every time.
Invoice factoring is easy to qualify for
An invoice factoring company uses your customers’ credit score as a qualification basis to decide what invoices they are willing to factor. Small businesses that might find it challenging to get the capital they need through a bank loan won’t have the same problem with invoice financing. It could also take weeks to get approved for a bank loan. An invoice factoring company can approve a business in as little as one business day, and they can start factoring their invoices immediately.
If you’re looking to get access to your working capital and grow your business, invoice financing is the perfect option for you. Give us a call today at (205) 397-1240 or fill out our online form here to see if you qualify.