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When to Turn to Factoring

Businesses, whether a start-up or a growing company can find themselves short of cash.  Many companies have a strong balance sheet, but they do not have the cash needed to make payroll or pay bills. 

These same companies may have accounts receivable, unpaid invoices, that will solve their problem.  A factoring company can help a company get a boost of cash quickly, with less paperwork and restrictions than a bank would require. 

A factoring company pays cash on a percentage of your unpaid invoices.  Typically, from 75% to 90% of the face amount of the invoice.  The factor then assists you in collecting on those invoices.  When the invoices are paid, the factoring company gives you the remaining balance less their fee. 

In some instances, factoring is a better choice over a bank loan.  Factors require less paperwork and have a much faster turnaround time than banks do.  Factors are more interested in the credit strength of your customers than your personal credit score. Even with a tarnished personal credit score factors will base their credit decision on the strength of your customers. 

Funding That Keeps Up With Your Business

Today’s business world moves quickly, and sometimes opportunities appear and disappear fast.  Imagine you have the opportunity get a new customer that will take your business to the next level.  Ramping up will take cash!  Whether to buy inventory, hire additional employees or purchase additional equipment it takes cash to start and run the project.   Factoring your invoices gives you the cash you need to size the opportunity, knowing that any factoring fees paid are small in comparison to the profit you will earn from your new customer.

Factoring is especially advantageous if you have a large customer who is slow to pay.  Because your customer is a good credit risk, a factoring company is likely to buy your invoices to that customer.  Factoring will allow you to stay current on your financial obligations bridging the time it takes your customer to pay.

For over 42 years American Receivable has helped companies with their short-term cash needs.  We provide a quick and easy way to- turn your invoices into cash to cover your expenses and growth. Call us today at 1-800-297-6652 to find out how American Receivable can take your business to the next level. Reach out to  Jack Stieber or Brad Gurney at 1-800-297-6652 or complete our quick application form.