Many companies turn to invoice factoring because bank loans are expensive, add to a company’s debt, take months to complete, and are turned down more often than not. On the other hand, invoice factoring is inexpensive, incurs no debt, is fast, and easy. So, the benefits of invoice factoring are obvious, but what happens when banks start offering invoice factoring?
Invoice factoring has been around since the pilgrims and has become so mainstream in American business that even banks are getting more and more involved with invoice factoring. Invoice factoring topped $500B, up over 50% in the last 5 years, with banks offering a significant part of that growth.
So, why would a bank like Wells Fargo start factoring? Well, mostly because of the low risk to everyone concerned and the high value to small business owners. The problem with banks offering invoice factoring is that the banking industry is one of the most highly regulated industries in the country. To mitigate the cost of all those banking regulations, banks often only work with the largest, most financially secure, and cash flush businesses.
So, if your business is new, has little credit, has any tax or legal issues, banks often can’t or won’t factor their invoices. And even if they can and will, the factoring costs, which are traditionally pretty low, are often much higher with banks.
Therefore, even if a bank will factor your invoices, often you’re in better hands, with a traditional invoice factoring company like Universal Funding. To find out how to factor your invoices quickly, easily, and inexpensively, give us a call at 1-800-405-6035.