Although the economy has seen slow signs of growth in the last few years, many businesses are still struggling to increase their cash flow as they wait for payments from vendors, many of who are financially struggling themselves. As small companies try to compete in a crowded marketplace, they may find themselves wondering how to get ahead, and when it takes weeks or even months to get your invoices paid, the challenge becomes even more critical. In a tough market where most small business owners can’t even get a loan from the bank, accounts receivable factoring may be able to help you overcome your financial hurdles.
Invoice factoring helps small business owners easier than a bank loan
When a small business works with a vendor, they often have very little leverage in regards to managing the terms of their invoices with suppliers. Most of the bigger vendors that small businesses work with have terms associated with their invoices that allow them to wait one, two or even three months before the invoice is considered due for payment. For many small business owners, this creates a difficult cycle in which owners are stuck waiting for invoice payments that they need to put back into the business for more inventory, to make repairs, or to pay other bills. Invoice factoring provides money to your business that is based on the amount of your outstanding invoices. The company takes over your outstanding invoices and pursues payment themselves, so that you can have the money you need now – not three months down the road. It’s a smart alternative to incurring debt or giving up valuable equity, and it’s typically much easier than trying to get a small loan from the bank.
Your business needs money now – not later
Many different types of small businesses have started invoice factoring because they need money for the business now – not later! Collecting on a late invoice can be incredibly time-consuming and frustrating, but with this type of service, business owners can get their money faster, making it easy to avoid the dangerous crunch for cash that so many face month after month.