As a business owner, you know just how essential it is that your customers pay their invoices promptly. The problem, however, is that most don’t. And when they don’t, it makes running and growing your business more challenging.
Instead of waiting for payment, many businesses utilize factoring. They sell their unpaid invoices to a factor in exchange for immediate working capital. With access to money when you need it, you can continue to work toward your business goals. If you’re on the fence, here are a few benefits to consider.
No Additional Debt
With receivables factoring, you don’t take out a loan. Instead, you sell your unpaid invoices (at a small discount). You get most of the money upfront, but the factor typically holds up to 30% in reserve. After your customers pay, you get the reserve minus the company’s fees.
Get Money Quickly
Instead of waiting weeks to months for loan approval and funding, factoring allows you access to cash much more quickly. The process is much quicker, saving you a substantial amount of time while also allowing you to meet the more immediate needs of your business.
Many forms of business financing require collateral. Receivables financing doesn’t. For businesses without significant collateral to offer, this can provide a huge relief.
Jump on Opportunities
When a unique business opportunity arises, you generally don’t have a lot of time to act. If you were to apply for a loan, that opportunity could disappear before your application made it halfway through the underwriting process.
Jumping on opportunities can be vital for the success and growth of your business. Factoring provides you with access to near-instant cash, allowing you to act right away.
Waiting for your customers to pay is hard enough. When you have to chase them down and constantly remind them their invoices are due, that adds a lot more stress to your job. Many factoring companies have professional collections services. They can manage collecting debts from your customers, taking the task off your plate. As such, you can focus your time and attention on other, more important, parts of your business.
Achieve Your Business Growth Goals with Receivables Factoring
With receivables factoring, you get money quickly. You can meet the daily needs of your business and have the funds on hand to grow, too. It’s an excellent alternative to traditional business loans that can help you make your business dreams come true.