5 Reasons Businesses Factor
Factoring offers companies the ability to quickly raise cash when traditional bank loans are not an option. Invoice factoring also works when businesses are experiencing rapid growth and need cash to purchase materials, pay vendors and cover operating expenses.
Five reasons to consider Invoice Factoring:
1. Invoice Factoring is a fast way to raise money. A factoring agreement can be confirmed within days, which means a company can receive cash quickly. This benefits the company needing the cash advance for expenses or expanding operations.
2. Invoice Factoring shortens the collections process. Businesses waiting weeks or months to receive payment for services provided may find themselves cash poor, without the funds necessary to expand business or pay current operational expenses.
3. Invoice Factoring allows companies to secure funds without acquiring new debt. Debt can be an effective tool to build and sustain a business but it can also be risky, especially for new or small businesses.
4. Invoice Factoring works for companies ineligible for a bank loan. Getting a business loan has always been challenging and in today’s economic climate, it is even more difficult to qualify and receive a bank-issued loan.
5. Invoice Factoring helps companies lacking a structured collection department. Factoring can provide the money needed to survive and/or expand by advancing money against invoices and then collecting them.