Your new company is off to a good start. You have established customers, are receiving and fulfilling orders, and are regularly sending out invoices. However, you don’t yet have the cash reserves needed to make big purchases or hire new employees. What if your business encounters an urgent need, such as funds to make payroll one month, or cash to cover an extra shipment of raw materials? Getting a bank loan is difficult with little or no credit history for your new company. When faced with a need for cash, your young business can get help through accounts receivable funding from a factoring company.
How Will Accounts Receivable Funding Help My Business?
You do not have to wait for invoice payments to come in to have cash on hand. Your company can sell your open invoices to an invoice factoring company and get a quick influx of cash through a process called invoice factoring or accounts receivable funding. The funding company can approve your application and grant you a lump sum in a matter of days. In exchange, they will collect customer payments on the invoices that you processed through them.
How Does Invoice Factoring Work for My New Business?
You may have little or no credit history due to the young age of your company, but accounts receivable funding is still an option. Invoice factoring is not a loan, so the factoring company does not need to deeply investigate your organization’s credit worthiness. In fact, accounts receivable funding takes the payment history of your customers into consideration, so the funding company will focus on the credit of the customer paying the invoice rather than on you. The funding company also considers variables such as your sales volume and the climate of your industry.
In the early stages of your company, you can likely qualify for accounts receivable funding. Even though you do not have the credit history of a more established business, you can get quick access to cash with invoice factoring. This process will also help to build up your company’s creditworthiness with no new debt being created.
If your business needs immediate cash, call Universal Funding at 1-800-405-6035 or submit a rate form today.[hs_action id=”1489″]