Invoice Factoring for Manufacturing Companies

Get access to revolving funds when you need it most.

Invoice Factoring for Manufacturing Companies

Let's Get Started

Table of Contents

    Manufacturing Industry Overview

    The manufacturing industry is a leading sector in the United States. According to the Bureau of Labor Statistics, the manufacturing industry employs more than 12.75 million people, which makes up close to 9% of the US workforce. The leading manufacturing industries ranging from consumer goods and electronics to petroleum, automotive, and food processing. With such a large economic footprint there is a constant need for working capital to meet the demand of the manufacturing companies. Manufacturers rely on US-based and international suppliers to provide raw materials and parts for production.

    Whether large or small, manufacturing companies require working capital to support ongoing cash flow needs. Many expenses are incurred when purchase orders are received and while the product is being manufactured, all before being able to invoice customers. Manufacturers need capital for payroll, materials, inventory, and day-to-day operating expenses. In addition, after goods are shipped manufacturers typically wait 30-90 days to get paid by customers. In some cases, invoice terms might be as long as 120 days. This results in a large cash flow gap and is the reason why many companies utilize factoring for manufacturing companies. Our manufacturing factoring specialists at SMB Compass are here to walk you through the benefits of using our specialty factoring programs.

    Ready to apply for an Invoice Factoring?

    Benefits of Factoring for Manufacturers

    Eliminate Amortizing Debt

    A major benefit of invoice factoring that there are no monthly payments when you sell an invoice. Unlike traditional financing where you make interest and principle payments, with invoice factoring the factoring company is paid when invoices are paid. By eliminating amortizing debt, you will no longer have large monthly payments due to a lender.

    Take Advantage of Supplier Discounts

    Manufacturing factoring accelerates payments on open invoices which results in more cash in your business. Many suppliers offer discounts for early payments on materials and with more available capital manufacturing companies have the ability to take advantage of supplier discounts to increase profit margins.

    Improve Working Capital

    Invoice factoring turns invoices into cash that can be used in many areas of your business. By working with a manufacturer factoring company you will have more cash on hand to use for operational expenses.

    No Monthly Volume Requirements

    Our manufacturer factoring programs provide ongoing flexibility with no volume commitments. This means that you can pick and choose which clients you want to factor, which invoices you want to factor, and the frequency at which you want to utilize your factoring line of credit.

    Free Customer Credit Checks

    Knowing who you work with is a crucial part of making sure that you are going to be paid for the work you do. When using factoring for manufacturing companies you can rely on us to run free credit checks on new and existing customers to make sure they are financial suited to pay your invoices.

    No Long Term Contracts

    We believe strongly in always working hard to earn relationships. Constantly delivering, providing excellent customer service, and keeping our clients happy is how we maintain long term relationships. This is what enables us to provide either no committed contracts or short-term contracts for our clients.

    Choosing the Right Manufacturing Factoring Company

    You should spend time researching every potential business relationship before entering into an agreement. This is the same when choosing a manufacturing factoring company to work with. Make sure that you work with a factoring company that has a deep understanding of your industry and takes the time to learn about your company. Our manufacturing specialists at SMB Compass will always make it a point to provide as much information and transparency as possible. Speak with a factoring advisor today to learn more about how SMB Compass can provide the working capital solution you are looking for.

    Ready to apply for an Invoice Factoring?