When Is it Time to Consider Factoring Receivables?

If you’re like most business owners and executives, it’s your policy to keep your company operating in the black as much as you can. Yet along those same lines, you also realize that no company has achieved or maintained success without needing some financial assistance along the way. No doubt you’ve heard of the potential benefits associated with factoring receivables. While well aware of its advantages, like fast approval and fast transfer of funds, you may still have questions as to when is the right time to start considering factoring as financial solution for your business.

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Some Scenarios that Call for Factoring

While no two companies take the same exact path to factoring, many of their stories tend to share similarities. These typically include:
Difficulty meeting operating expenses: Those companies that have to wait on customers paying their invoices will often experience financial difficulties in the meantime. Being able to collect on accounts immediately after being invoiced can help to relieve the stress cash-strapped companies often feel when struggling to meet payroll, secure inventory, and handle their other business expenses.
Desire to avoid collections: This isn’t referring to a company being referred to collection agency themselves, but rather having to collect on outstanding invoices from their own customers. These are the same people on whom they rely for their business. Having to turn from being a service provider to debt collector can easily strain professional relationships.
Not wanting to assume more debt: There comes a time in the operating life cycle of every company where money is needed to support growth. Yet does that growth have to come at the expenses of a company’s financial flexibility? In the case of factoring, no it doesn’t. When selling invoices to a factoring company, you’re selling an asset, not taking on debt. Thus, you’re allowed to pursue expansion while still staying within your operating budget.
Once you’ve determined that factoring receivables is your preferred method of funding, the next step then becomes to find a factoring partner that will help you to achieve all of your immediate financial goals. Universal Funding wants to be that partner. To get a low factoring rate quote for your company, simply fill out our online rate form today and one of our reps will give you a call to learn more about your business and its needs.

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