What Benefits do Factor Companies Offer to Businesses?

In today’s world, the state of your cash flow says a lot about the future of your business. Analysts typically look at cash flow problems as a sign that there is a larger problem within the business. Cash flow issues are normal for growing businesses, and it’s all about how you handle those problems that makes the difference between you and your competition.

Factor companies like Universal Funding offer a unique solution to your cash flow issues. With invoice factoring, you sell your invoices in order to access cash that is rightfully yours without taking out a loan.

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How it Works

Invoice factoring is a simple process when done right. As you take on larger clients, they may need longer payment terms, some going out as long as 90 days. As you are waiting for them to pay, you still have to pay your bills and your employees. How do you do this without access to cash? That’s where invoice factoring comes in.

Factoring companies will buy your invoices and advance you the cash, while holding the invoice until your client pays in full. Once the obligations are met, the rest of the invoice is forwarded to you with just a small fee deducted for the service. This allows you to focus on growing your business with access to cash and no smothering debt.

What Are the Benefits?

Invoice factoring gives you quick access to cash that you’ve earned. As your business grows and you build up the cash to handle larger accounts, factoring gives you the space you need to pay your bills on time.

With factoring, you aren’t required to go through the lengthy process of applying for a loan that comes with traditional banks and lending institutions. Simply put, you don’t have the time to wait as you purchase inventory and expand your business to meet demands. You need access to cash fast, and banks can’t give that to you. Factoring companies can.

See for Yourself

To learn more about factoring and how it can help your business through the growing pains of cash flow problems, submit our rate form today.

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