Is It Easier to Qualify for Invoice Factoring Than Conventional Loans?

Is It Easier to Qualify for Invoice Factoring Than Conventional Loans?

Is It Easier to Qualify for Invoice Factoring Than Conventional Loans?

Cash flow issues are a common challenge faced by businesses, especially smaller ones and start-ups. They require business financing for expansion, marketing, buying equipment, and much more.

Typically, big businesses have the option to approach banks to apply for loans to increase their credit. However, new businesses without adequate credit history or those that do not want to add debt to their financial situation find alternative financing options such as invoice factoring.

What Is Invoice Factoring?

An invoice factoring company can provide you with credit of up to 98% on your outstanding invoices. 

Qualifying For Invoice Factoring

A huge advantage of working with an invoice factoring company is that they do not need detailed financial histories of a business before providing adequate working capital. 

It is a known fact that banks have strict rules and regulations in place, especially concerning loan approvals. Before approval, they require information on how the business has operated in the previous year as well as complete credit history. This process can be tedious and can take weeks to complete.

Invoice factoring, on the other hand, is quick and can be completed within 24 hours.

So, how does it work?

  1.     Contact: The invoice factoring agency will meet with you to discuss the feasibility of your outstanding invoices and if you are eligible for this type of funding.
  2.     Application: Next, the agency will ask you to fill out their form as well as provide a detailed breakdown of all outstanding invoices, among other documentation.
  3.     Legitimacy: The agency will verify all your documents, ensuring they are registered with the right government agencies.
  4.     Offer: Once the documentation is verified, the agency will provide you with an offer that falls between 70% and 90% of the amount of your invoices amount to.
  5.     Payment: Once the offer is made and accepted, the money is deposited into your business banking account.

For more information on business financing and invoice factoring, contact Kore Capital today.

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