How Does Invoice Factoring Work?
As you explore whether factoring invoices is right for your business, you’ll want to learn more about the process that is involved. You’ll want to understand what is factoring, what your role is, and how it will affect your customers.
By selling invoices, companies can focus on more important issues such as creating more products and finding new customers, rather than dealing with the frustration of chasing down payment from sales that have already been made. If your business has invoices that are not only weighing down your balance sheet, but are costing you time, money and effort to collect, consider selling these invoices to an experienced invoice factoring company.
Is Invoice Factoring Right for Your Business?
Invoice factoring converts your accounts receivable into working capital without creating debt or adding liability. Factoring does not rely on your credit rating, collateral, or bringing in investors, so companies that have faced previous cash flow challenges more easily qualify for funding.
When you work with a factoring company, you are not restricted in how you use the funds like many traditional financial institutions. You can use the funds to cover payroll and other payments vital to your business. And, you can use it as the need arises without having to reapply. Selling your accounts receivable offers you a flexible form a financing that scales with the growth of your businesses without lengthy paperwork.