One key tool business owners use to close deals and increase sales is to offer payment terms to their customers. 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.
Increasingly 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 competitive payment terms with your clients.
If your competitors don’t offer payment terms, this could be an opportunity for you to gain an advantage extending those terms to your customers. And, if your competitors offer these terms, you will want to do the same to remain competitive.
The difficulty in offering payment terms is that you are essentially “financing” your customers. Often you have to pay for raw materials, payroll, rent, etc., long before your customers pay you. In doing so, it can create a cash flow crunch for your business.
Balance Cash Flow While Earning New Business
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.