One key tool business owners use to close deals and increase sales is to offer payment terms to their customers. Today this is common practice and often expected in order to do business with some companies. Not only do buyers for big companies expect terms of net 30, 45 60, or even 90 days, but increasingly buyers for small businesses expect similar terms.
If your competitors don’t offer payment terms, this could be an opportunity for you gain an advantage extending those terms to your customers. If your competitors are offering these terms, you will want to do the same to remain competitive.
The problem with offering payment terms is that you are in effect “financing” your customers. Often you have to pay for raw materials, payroll, rent, etc., long before your customer pays you. In doing so, it can create a cash flow crunch for you.
Offer Competitive Terms without the Cash-flow Crunch
So, how do you balance cash flow with earning new business? More and more business are looking into new methods of financing beyond traditional loans, lines of credit, and credit cards. They have found that selling some of their invoices to a factoring company is a quick and simple way to meet their cash flow needs.
Selling your invoices is called invoice factoring. Many businesses can be approved for invoice factoring in a matter of days. The invoices can be sold and money transferred in a matter of hours. And, because you’ve incurred no new debt, there are no payments. It is the fastest, short-term financing solution to utilize while you implement term payments for your clients.
To find out how you can start offering your customers payment terms, give Universal Funding a call at 1-800-405-6035 or fill out a rate form and a factoring specialist will get in touch with you right away.