You need to keep one step ahead of the competition at all times in order to maintain your consumer base. If you fall behind on production, you cannot attract potential customers and your current clientele may begin to explore your competitors’ products. Losing clients to competition means less cash for your business. A lack of cash reduces your access raw materials or your ability to pay for the help you need to produce goods will eventually slow your business down. Factoring invoices can generate the funds your business needs more quickly than a bank loan. You can sell your company’s open invoices for an advance payment that will replenish the cash reserves and get you back in front of the competition.
How Invoice Factoring Gets You Cash
Accounts receivable financing is the process in which a factoring company purchases open invoices from an organization that needs cash. The invoices become financial assets of the factoring company, allowing them the legal right to collect the dollar amounts on the invoices from the organization’s customers. In other words, you can sell an invoice to a factoring company to get cash before the payment is due. In exchange, the factor will receive full payment from your customer, and remit the remaining balance to you.
Why Invoice Factoring Is Quicker Than a Bank Loan
The traditional lending process can take weeks or even months. Bank loans often involve complex applications and lengthy approval processes. If the loan is approved, there still may be a waiting period before funds are available. If you are trying to keep production from coming to a halt, you need an influx of cash much faster than that. Factoring invoices is a much simpler process, and your application can be approved in a matter of days. The lump sum payment is immediate, so you can get back to work and keep your customers satisfied.
Don’t let the competition snap up your customers while you wait for funds from a bank loan. Accounts receivable financing can help you maintain adequate cash reserves, keeping you one step ahead of your competitors. If you need to replenish your company’s cash reserves, contact a representative at Universal Funding by calling 1-800-405-6035 or submit a rate form today.[hs_action id=”1489″]