What is Factoring?
Factoring is the act of selling your invoices for an upfront sum of cash. This can be a huge help to small business owners who are looking to grow their company but don’t have the capital in place, or need more liquidity.
It’s also perfect for those entrepreneurs with a stellar reputation and lots of potential clients – but not enough time in the day to service them all.
Factoring companies buy your unpaid invoices at a discounted price (usually 65% of what they’re worth), meaning you can spend less time chasing payments from late-payers and instead focus on making new sales!
Increase Working Capital
You’ve probably heard that cash flow is the lifeblood of any business. But what are you supposed to do if your customer says they’ll pay eventually?
Accounts receivable factoring solves this issue by turning those invoices into a steady stream of income for companies with either bad credit or no credit at all, and lets them have continuity in their operations while also having extra money on hand to fund their growth.
Every business needs the steady flow of cash, and invoicing clients can be a difficult process.
Accounts receivable factoring is an option that turns your unpaid invoices into waiting money so you don’t have to wait for customers to pay their bills before they’re able to use them as income again.
This provides businesses with consistent flowing resources without skipping a beat in operations.