What is Invoice Factoring and How Can It Help Your Business?
Invoice factoring, also known as accounts receivable factoring, is a widely-used form of financing among growing companies, recovering businesses and entrepreneurs.
Many of the largest and most stable corporations in America and Europe utilize invoice factoring as a means to speed up their cash flow so that they can seize opportunities to increase their market share.
Advantages of Factoring over Traditional Financing:
- Invoice factoring provides an unlimited line of working capital, limited only by the amount of business you can generate, not on the amount of your assets
- You qualify for cash advances based on your customer’s creditworthiness, not yours
- Invoice factoring does not increase your debt position
- Invoice factoring can help improve your credit rating & collections
- New orders generate cash within 24 hours – not 60 days
- No time-consuming audits are required – and no restrictions on the use of proceeds
Proceeds from Factoring can be used to:
- Increase your sales
- Take supplier discounts
- Increase your staff or fund payroll
- Purchase new equipment
- Increase your inventory
- Improve your credit rating