When Should You Consider Invoice Factoring?

Invoice factoring is a lesser known option that many multi-million dollar companies overlook. If you are in the business of light manufacturing, distribution, oil, gas or mining, you may be sitting on innumerable invoices that can be sold to factoring companies like Universal Funding to provide you with quick money. There are many businesses that have an accounts receivable department to manage invoices. How do you know when it is time to consider factoring those invoices?

Time business concept.

Your Business Needs Cash Now

Factoring invoices is much like selling any other product. When you take your invoices to a company like Universal Funding, you can get quick payment for the transfer of the invoices. That cash can then be put to use right away for bills, purchase of products, taxes, payroll, business growth or any other reason you can think of. You can still get the money you need without waiting for customers to make good on their invoices.

Your Accounts Receivable Are Sitting Stagnant

Your clients generally have a designated amount of time to pay on their invoices. If you have extended terms to your customers this time period may range anywhere from one to three months. If you have a large pile of invoices that are stagnating, waiting for payment, they aren’t doing you much good. By selling them to a factoring company, you receive the revenue associated with the invoices rather than stuffing for your file folders.

Difficulty Qualifying for a Loan

Even when your business generates over $1 million in gross revenue annually, you can run into difficulties when applying for a loan through a bank or other lending institution. Loans can also take an extended time to process. Time you may not have. On the other hand, invoices factoring can get you cash almost immediately, and there are no loan repayments to stress about.

Contact Us Today

Universal Funding can help you decide if invoices factoring is a good idea for your business. If your company generates more than $1 million in gross revenue, but still experience cash flow shortages, fill out our rate form today.

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