Can a Company Be Too Big to Factor Invoices?

Just because a company sees annual revenues over $100 million doesn’t necessarily mean they are free of cash flow concerns. Even if they have a healthy relationship with their bank, they may still require additional financing.

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Recently Universal Funding was approached by a machine press operator based in the heart of the Midwest.  This company provides their services to well-known manufacturers within the automotive industry. With annual sales nearing $150 million, this company has a multi-million dollar bank line that recently reached its limit. The company’s CEO recognized that factoring their invoices for several large clients would be an ideal solution to free up money. They want to factor invoices for 3 automobile manufacturers whose invoices roughly total $2 million dollars per month.  Large corporations, auto manufacturers included, are notorious for being slow payers, demanding terms well beyond 30 days. Factoring their accounts receivables means they don’t have to wait out 30 or even 60 days to be paid after providing their services.

Having immediate access to $2 million dollars per month will allow this company to immediately cover payroll for their 500 employees, allow them to invest in new technology, expand their buildings, or purchase raw materials in bulk. They no longer need to put off a production run or decline new business because they are waiting on large payments to come in.

If you think your business is too big to use the services of a factoring company, thank again. Companies of all sizes experience situations where they need quick access to funds, but the bank won’t increase their lines. This is where Universal Funding can play an integral role in the healthy financial outlook for a company.  If you’re ready to end the invoice waiting game, give us a call at 1-800-405-6035 or fill out a free rate quote and one of our reps will contact you in  a matter of minutes.

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