How Does Factoring Help Your Business?
What Is Factoring?
Factoring helps you to get the cash that customers owe to you. We aren’t talking about settling debts, but rather paying the invoices that you are waiting on a customer to pay. For example, you may have sold something with a 6-month payment term. Instead of waiting around for the customer to pay off the money, a factoring company will provide you with a cash advance immediately. The proceeds of your customer’s payment satisfies the amount you owe to the factor and the balance goes to you. It is a quick and simple way to get the cash that was already owed to you.
How Can Factoring Help Your Business?
Factoring solutions can provide many benefits for your business, such as:
- Access to quick cash
You sometimes cannot wait on customers to pay off their invoices. If you need cash for vendor payments or payroll, factoring is the best solution to get cash quickly. It is a lot quicker than waiting for a bank loan and you won’t need lots of paperwork. Factoring can take one or two weeks at most.
- It is affordable
A factors fee will typically run between 2% to 3% of your invoice value. Growing companies often turn to to factoring to support their growth. The additional revenue that factoring enables will often more than pay for the factors fee.
- Easy collection process
Depending on the type of factoring you choose, a factoring company can handle the payment of invoices from your customers, making it much easier on your time.
Contact us for our factoring solutions today!