All Purpose Lenders

Beginners Guide To Invoice Factoring

Growth is an important goal for businesses in every industry. However, it can oftentimes be difficult to grow your business when that growth is contingent on the acquisition of additional debt, further burdening your business operations. Fortunately, this is not the only way to increase your business profits.

Invoice factoring is a simple and convenient way to increase your bottom line by selling the accounts receivable of your business for cash. This is a form of asset-based financing where businesses buy and sell accounts receivable invoices to others at a discount. There are many reasons why invoice factoring could work for you and save you both time and money.

Are you tired of waiting weeks for invoices to become due?

Once they become due, do you have trouble actually collecting on them?

Invoice factoring is guaranteed immediate income and it avoids the administrative burden of waiting for your accounts receivable to mature. This is useful in two ways: it increases your bottom line instantly, and it reduces your administration and collection expenses at the same time. There are countless reasons why your business might need cash now. Meeting payroll, paying suppliers, IRS issues and liens are just the tip of the iceberg. By selling invoices, you can be assured of guaranteed cash within just a few days of the transaction.

If you are a small business with limited capital, you don’t have the same resources available to you as would a larger company with several departments. By having to wait for accounts to become due, you are limiting your earning potential and spending more time than you need to on an administrative function that could be handled by someone else. Time management is the key to success in any field, and invoice factoring is a great way to allow you more freedom to spend your time in useful and productive ways. You can decide which accounts you’d like to sell, which you’d like to keep, and how best to structure the timing of account sales so as to best meet your business and cash needs.

Reliability of cash flow means your business is more stable and able to take advantage of new business opportunities as they arise. By leaving the collection process in the hands of an experienced company, you are allowing yourself and your company more leeway to achieve your full potential.

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