Boost Your Cash Flow With Invoice Factoring
One of the more common challenges faced by small-to-medium-sized businesses is maintaining positive cash flow. Even if a company creates enough revenue to pay its bills and expand operations, it could find itself in a cash crunch. Why is this? In many cases, businesses suffer because of the lag between billing customers and eventually receiving payment for the invoiced services.
By performing services or providing products without receiving payment in advance, your business has essentially loaned a client the value of said services or products. If the same client takes 30, 60, or even 90 days to pay their invoice, your business will have to operate without the already-earned cash even though you face bills of your own to pay. "Let Us WAIT The 30, 60, or 90 DAYS For PAYMENT".
Invoice factoring allows your business to receive from 75% to 95% of your customer invoices more quickly when your business will benefit the most.
How Invoice Factoring Works
Invoice factoring is one of the easiest ways for small businesses to secure short-term operational funding and is especially useful for companies unable to obtain traditional bridge financing. In most cases, this is how invoice factoring works:
- Your business invoices your customers for goods or services that you have already provided.
- Rather than waiting a month or more to receive payment, you sell the invoices to a lender and immediately receive up to 95% of the invoice value.
- The customer pays your factoring lender for the services that you provided.
- The lender sends your business the remaining amount due: the amount paid to the bank by your customer minus the amount initially advanced to your company and a refactoring fee.
Invoice factoring can provide continuous funding for your business, with cash available in a timely manner. Factoring is generally suited for companies with over $2 million in annual sales. There is FUNDING for SMALLER INVOICES.
Why Should My Business Consider Factoring?
While there are many reasons to consider factoring, maintaining your company’s operational capacity may be the most important. Even with a sizable customer base, businesses must consistently pay monthly bills and debt obligations. They may have to cover payroll and inventory expenses as well as compensate their vendors. Companies that cannot meet these obligations may become limited in purchasing new inventory or hiring the staffing necessary to drive revenue. Then a cash flow problem becomes a revenue problem and, consequently, a profitability issue.
The earlier your business addresses cash flow challenges, the better equipped you will be to take advantage of future opportunities and improve your overall profitability.
How to Get Started
If your business has questions about invoice factoring and would like to speak with a loan originator, contact Ponce D. Moody Funding today. We will provide a confidential opportunity analysis and help you secure the best possible terms for your factoring strategy.