Finance factoring, or invoice financing, is the process of selling pending invoices to a factoring company at a discounted rate. This is a popular financing solution among small business owners because it offers immediate funding and is suitable for companies in all types of industries. Here are four of the most common industries that benefit from finance factoring:
1. Construction Finance Factoring
Businesses in the construction industry often deal with delayed payments. Construction factoring alleviates this issue so the business owner isn’t left waiting months on end to be paid. Whether you’re an independent contractor or a small construction company, finance factoring will help bridge the gap between accounts receivables and accounts payables.
Enabling a steady cash flow will allow your business to fund future projects, effectively compete with larger companies, order high-quality materials and hire extra staff. Another plus is that you won’t have to manage and keep track of your invoices because the factoring company takes care of that.
2. Manufacturing Industry
Business owners in the manufacturing industry are often faced with significant cost requirements, like machinery repair, maintenance costs, payroll and daily operating expenses. Companies without adequate funding often struggle to stay afloat.
Invoice financing lets manufacturing business owners sell their pending invoices to factoring companies in order to receive immediate funds. Once your business gets a hang of invoice financing, it’s easier for you to generate working capital and scale the growth of your business.
3. Printing and Publishing
Invoice financing is a viable way for printing and publishing companies to acquire the financing needed to grow and expand. Not only does it allow for a steady stream of cash flow, but you don’t need a remarkable credit score to receive it. Factors are more concerned with your customers’ creditworthiness, as opposed to your business’ financial history, since your customers are the ones paying for the invoices.
4. Professional Services
Not every business can wait 30 to 60 days to receive payment for an invoice. You have bills to pay, equipment to maintain, and employees to compensate – you need funds and you need them now. Businesses that offer credit terms to their clients are qualified for invoice financing, and once you’ve submitted your applications to lenders, you can usually receive the funds within 24 hours. Many professional and business service providers like architects, engineers and legal firms can benefit from this process. Plus it’s easy to qualify. As long as you have outstanding invoices, you are eligible for invoice financing.
No matter which industry you belong to, finance factoring can help your business in more ways than one. SMB Compass can provide the financing you need to take your business to the next level. If you want to know more, call us via phone call at (646) 569-9496 or email us at firstname.lastname@example.org. We’d love to hear from you!