Factoring helps your business by getting you the cash that was already owed to you quickly. Factoring is a business financing solution to solve all of your cash flow problems. If you are wondering what is factoring and how it can help your business, this blog will answer all of your questions.
How Factoring Helps Your Business
Factoring is selling your invoices, or accounts receivable to a third party for a fee to get immediate access to the money owed 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 satisfy the amount you owe to the factor and the balance goes to you. Factoring helps you to get the cash that customers owe to you.
A Factoring Company Helps Businesses:
– Get 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.
– Because it is Affordable
A factors fee will typically run between 2% to 3% of your invoice value. Growing companies often turn to factoring to support their growth. The additional revenue that factoring enables will often more than pay for the factor’s fee.
– Streamline the 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.
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.
Kore Capital offers factoring and asset-based lending financing solutions to help your business with quick funding.
Contact us for our factoring solutions today!