Factoring invoices refers to the process whereby businesses sell their accounts receivables to a factoring company. The reason factoring invoices is so popular is that it offers businesses an alternative to traditional business financing, which can be expensive and hard to get. Factoring invoices allows businesses to quickly access the cash they need to expand production, buy new equipment or simply cover day to day operating expenses without going into debt or jeopardizing customer relations.
So how exactly does it work?
Businesses in need of fast cash review their outstanding invoices, current, past due, and defaulted. They determine which invoices they need to sell in order to cover expenses and then contact an invoice factoring company. The factoring company will make them an offer based on the collect-ability of the invoices and then, if everything is acceptable by both parties, the transaction closes with the funds being transferred to the business in a matter of a few days, sometimes in as little as 48 hours. This expedited timeline is what makes the process beneficial; other lending institutions have a much longer application and waiting process.
For more information on Universal Funding and the financial assistance that we can provide your business, give us a call today at 1-800-405-6035 or submit a rate form for a free consult on your financing options.