Everyone loves to get paid faster, not just you. With a good cash flow plan in place funded by invoice factoring, you will be able to take advantage of volume and early pay discounts from your vendors, an immediate increase to your bottom line that often outweighs the costs of factoring.
While factoring is commonplace in many parts of the world, in the US many businesses aren’t sure how it can help their business grow.
Factoring is simple to apply for and can be very flexible for your business. For example, factoring allows a company’s working capital to grow as fast as their sales grow, without any additional paperwork or renegotiation. That means that you can always have access to the capital you need, no matter how busy you become.
Volume and Early Pay Discounts
Professional Collection Services
A good factoring company provides a professional collections team with industry experience which eliminates the hassle and headaches of managing collections on your own.
Purchasing Inventory
When you do business with a factoring company, every sales invoice can be turned into the cash flow needed to purchase more inventory, allowing you to get bulk discounts and increase sales. No more waiting weeks to get paid by slow paying customers.
No Debt Incurred
Factoring is NOT a loan; it is a purchase of your outstanding receivables. This means you are not incurring any debt with factoring. As a consequence, your balance sheet looks more appealing when trying to obtain financing for items like additional equipment or even selling your company.
Invoices Get Paid More Quickly
Integrity Factoring is a credit reporting agency who reports our pay experiences to Experian and other credit agencies. Debtors who are aware of this will typically pay faster to make sure their credit rating is not impaired.
Credit Screening
Factoring companies provide you with credit information on new customers guiding you to make better credit decisions on who you work with. They say that some of the best decisions a company will make is who not to work for!
Unlimited Capital
Factoring is the only source of capital that increases in lockstep along with your sales growth. Having your cashflow increase equally to your increase in sales gives you the ability to take on as much work as possible without the worry of running out of cash to pay your bills.
Start-Up Funding
A factoring company can provide a start-up with the cash they need to take on as much business as they can handle. A bank, on the other hand, will usually not factor a start-up, preferring to finance companies with hard assets they can use as collateral.
Poor Credit?
Factoring companies base many of their funding decisions on the quality of your debtor’s credit, not yours. This allows companies with un-established credit or individuals with poor credit to still be approved for factor funding.