No two companies are exactly alike. Even similar companies serving the same industry can have vastly different ways of earning money, completely different spending strategies and differing ways of handling accounts receivable. That’s the beauty of the business world, but also the bane of many commercial financial companies. There are no one-size-fits all financing strategies that apply to all businesses. Even invoice factoring, a relatively straightforward and simple financing tool, can be tailored to the needs of individual business.
Invoice factoring or selling your accounts receivable provides a company with predictable and guaranteed payment of invoices. No waiting and no wondering when the cash will arrive from your customers. Companies that factor their invoices are able to take advantage of early-payer discounts and use the money to cover expenses and general overhead.
Now more than ever, businesses are under constant pressure to cut costs, streamline operations, while maintaining profitability. If companies are forced to spend extra time figuring out credit and cash flow concerns, less time is available for planning to increase sales and implement marketing efforts. Factoring gives business owners that time, in addition to a debt-free constant cash flow.
We Wait, So You Don’t Have To
Put simply, factoring is a method of getting paid immediately for the invoices your customers owe you in the future … 15, 30, 60 and even 90 days. A factor buys your customer invoices, effectively paying you right away. Many companies rely on factoring because they simply can’t afford for their invoices to go unpaid for two to three months.
With factoring, you can receive the money you are owed within a few business days; money you are then free to use however you see fit for your business. A strong cash flow is vital and factoring provides the capacity to grow when other forms of financing may not be available.
Offering payment terms to customers can be challenging when working with other businesses. Waiting 60 days to get paid can seem like a lifetime when you have bills that are due in 15. The situation can get even harder when a potential customer seems promising, but then asks for lengthy payment terms. Working with a factor can eliminate that worry and allow you to take on the customer while knowing you’ll be paid immediately.
Overcome Two Big Business Obstacles With One Solution
Companies in all industries routinely face these two obstacles:
- Unexpected expenses
- Late payments from clients
A factoring plan can relieve a great deal of stress in situations like these. Invoice factoring allows business owners to get cash much quicker than they would through their normal accounts receivable operations. Instant cash is just one of many benefits factoring can bring to your company. Factoring is not a loan, so you won’t have to open a new line of credit or take on any debt repayment schedules. Another benefit is free access to business finance professionals who can help resolve collection problems. Factoring can also provide access to credit and collection services at a fraction of the price of doing it yourself.
What Makes a Good Factoring Company?
While factoring is a business arrangement, you’re likely to have a fair amount of personal contact with the people at the factoring company you choose; more so than with a typical bank relationship. The ability to speak with your account manager needs to be as simple as picking up the phone and dialing. No complicated phone menus, just a real person answering your call.
As you consider the best fit for your company, here are some key attributes that will make for a better experience. The factoring company should:
- specialize in the industry you do business in, ensuring a knowledge and experience with the unique issues you face
- demonstrate a track record of stability, responsibility, and integrity
- offer access to a credit department staffed with experts in the industry
- employ a professional collections staff who treats debtors (your customers) with the same level of respect that you do
- offer no-charge business advice
- make quick decisions and provide your money fast
Of course, low rates and easy-to-understand terms are important too, but look for a factoring company that is interested in building a relationship with you and your business. Find a company that has similar goals and ideals as yours and you’ll enjoy a smooth path to financial growth and profitability.
Turn Your Invoices Into Cash Today
As any business owner knows, having enough cash available to operate and grow a company is a constant challenge. Large companies and corporations typically have an easier time securing the business funding they need on a regular basis and can access bank credit whenever it is needed. Small and mid-size companies often don’t have the luxury of easy money. Universal Funding offers rates as low as .55% and will advance up to 95% of your invoices. And we are very proud of our superior customer service, which means you could be on the path to faster cash, and more profits, in just a few days.
If you believe a debt-free line of capital that grows along with you could benefit your business, call us today at 800-405-6035 or complete our rate form and a factoring specialist will be in touch right away.