What can a factoring company do for your small business?
Are you selling goods or services to commercial customers or to the government? If so, you are probably used to the idea of having to wait up to 60 days to get your invoices paid. However, waiting to get paid can be challenging, especially if you have business expenses that cant wait.
That is where a factoring company can help you.
Factoring companies can provide you with financing, based on your slow paying invoices. They eliminate the 60 day payment waiting period and provide you with the necessary liquidity to meet payroll, pay rent and meet business obligations. Here is how factoring works in a nutshell:
1. You invoice your customers and send a copy of the invoice to the factoring company
2. The factoring company advances you up to 90% of your invoices
3. You get immediate use of the funds. The factoring company waits to be paid
4. Once the factoring company is paid by the customer, the transaction is settled
Although many business owners will go to a factoring company to get financing, factoring companies also provide other important services. Most notably,...