A Fast Financial Solution
Cash is one of the most important things businesses need in order to keep the business cycle going. When businesses choose to offer goods and services on credit in order to entice new customers to make purchases, they often find themselves in a cash flow pinch. Invoice factoring for business cash flow needs is a great way to keep the business cycle moving by providing the necessary cash to fulfill orders without adding debt to the balance sheet.
Benefits of Factoring Companies
Smart business owners are always looking for ways to improve their cash flow. Some have realized the effectiveness of working with invoice factoring companies. Factoring companies purchase the accounts receivable (A/R) and provide business owners with necessary cash to pay for expenses such as payroll, inventory, office supplies, marketing, advertising and even taxes. While you could go to a bank for financing, when you do, you incur debt. It could also be a more time intensive process effecting your company’s credit as well as your personal credit. When you research invoice factoring companies, like Universal Funding, you will soon discover the many benefits of factoring receivables including how fast we provide you with cash on a high percentage of the balance due on your A/R. You will not have to fill out unnecessary, complicated forms or have to wait an extraordinary amount of time before you get your answer.
Instead of sending statements and reminders to customers who fall behind on their payments, you can spend your time growing your business and planning for the future. Don’t let cash flow problems bog you down when you have a simple and fast financial tool at your disposal.
What are Factoring Rates?
When a company considers factoring its receivables, one of the initial questions has to do with accounts receivable factoring rates and advance rates. Unlike other industries, accounts receivable factoring rates are not determined by a credit score and can’t be quoted over the phone without first answering a number of basic questions to determine which may affect rates.
Variables that Effect Invoice Factoring Rates
Rates can vary from below one percent to over five percent of the face value of the receivable. When a factoring company reviews an application to determine the factoring rate, it takes into consideration variables such as: a company’s sales volume, the credit strength of its clients, payment cycle trends in your industry, invoice amounts, and overall climate of your industry. Another item that can affect the rate is the existence or the opportunity for accounts receivable insurance. A company’s credit score or the number of years it has been in business aren’t major variables that influence rates.
How to get Accurate Quotes for Invoice Factoring Rates
Ultimately, the best way to truly know what rates your company can receive is to take a few minutes to fill out a simple one-page rate form. While that’s all it takes to get the process started, keep in mind that any quote given is simply a starting point. Factoring companies can’t guarantee any quote until all requested documents have been provided and all information has been verified.