Factoring for business growth
You have probably heard the expression: “You need money to make money.” This is true–without working capital and consistent cash flow, your business will struggle to keep its head above water. When money troubles keep you awake at night and you simply cannot wait for clients to pay their outstanding invoices–invoice factoring can help you. Learn how to use factoring for business growth.
How to use factoring for business growth
Simply, sell your invoices to an invoice factoring company. You will get immediate cash to help fund your growing business and to pay your bills. Also, enlisting the services of a factoring company can offer these benefits:
- Promotes business growth by helping you fund new initiatives and ideas
- Improves cash flow to meet monthly expenses and helps prevent interest and additional costs on late payments
- Enables you to take on new business projects and to outlay money on these business projects
- Have fewer restrictions on what you spend the cash on than if you borrowed money from a bank
- Gives you cash flow to maintain and/or replace assets and inventory
- You can service larger clients and thus invoice larger clients with no worries about how long they take to pay you
- You can offer better payment plans to your clients
By hiring a reputable invoice factoring firm, you will be able to spend more time on growing your business and less time worrying about when invoices and accounts are going to get paid. Your factoring company has a vested interest in the growth and success of your business so they will treat your customers professionally–the more you earn the more the factoring company stands to earn. It’s a win-win situation for everybody.
Unlike a conventional bank loan, there is no limit to the amount of working capital your company or business can access through invoice factoring because factoring services are based on accounts receivable. As your invoices to your clients grow, so your access to working capital grows. This allows you to fund new ideas and business growth initiatives whilst keeping your business afloat, despite late or delayed payments by your larger clients and/or customers.