Invoice factoring comes in handy when businesses need to raise funds quickly, especially when they don’t qualify for traditional loans. Invoice factoring is also beneficial for businesses who are looking to purchase materials, pay vendors, meet payroll, and cover other day-to-day operating expenses.
These are just one of many advantages of invoice factoring. In fact, there are numerous reasons why businesses should consider invoice factoring at least once. Here are five primary reasons why your company should factor:
1. Invoice factoring makes raising money extremely fast and easy for businesses.
Most invoice factoring transactions are completed within 24 hours. This is very useful for businesses that need immediate working capital, as well as companies looking to quickly broaden their business operations. Applying for traditional loans take a substantial amount of time. Plus, it takes quite a while for traditional lenders to confirm whether they can fund your business or not.
2. Your business will have the money you need when you need it.
Sometimes, businesses have to wait for weeks or even months before their customers are able to pay them back for services rendered. For this reason, there may be times when businesses won’t have enough funds to grow their business or even pay for daily operational expenses. Invoice factoring enables you to access funds in no time.
3. Businesses are able to generate funds without having to take on new debt.
When used wisely, debt can be a great tool to grow and sustain your business. But you can’t deny the risk associated with it, especially for newly established businesses. Invoice factoring enables your business to obtain the capital you need without having to rely on expensive loans.
4. Invoice factoring is a great option for businesses having a hard time qualifying for bank loans.
It’s always been a challenge to obtain a business loan. However, it’s even more challenging these days since banks are more protective of their money. If a business has had problems of repaying past loans or if they’ve been on a hiatus for a long time, there’s a huge chance they won’t be able to qualify for a bank loan. When this happens, businesses might want to try invoice factoring.
5. Invoice factoring helps understaffed businesses or businesses that don’t have a collection department.
If your business does not have a collection department or an adequate number of employees, an invoice factoring company can step in. Not only can factoring companies provide businesses with adequate funding through advancing money on customers’ invoices, but they can also collect payments for them. Obviously, you will have to pay for these services but it’s worth it, especially for understaffed businesses.
If you want to know how to more about invoice factoring, contact SMB Compass. We help small business like yours to get the funding and advice you rightly deserve. We offer a variety of attractive small business loan programs with competitive rates and agreeable terms to our clients. Don’t hesitate to give us a call at (646) 569-9496 or email us at info@smbcompass.com.