One of the main challenges of running a successful business is ensuring that your company always has the cash it needs to grow. Invoice factoring is a great way to improve your liquidity. When you finance your receivables, you will receive payment for your invoices as soon as you issue them. This means that you don’t have to wait to get paid. The following are a few of the reasons you should consider this form of financing.
It’s Easy To Qualify
Lenders are happy to work with you to finance receivables. The decision is typically based on your customers’ credit, not your own. So, you can qualify even if you have a less-than-perfect credit history. Furthermore, you can receive funding even if your financials are not in great order (AR financing can help with that!).
The Funds Are Very Flexible
You are selling an asset (your invoices) to the lender. This means that you can use the money you receive for any reason. Unlike a mortgage or equipment loan, AR financing is as good as making a sale. The money is free for any use.
AR Financing Is Often Affordable
Compared to many other financing options, AR financing is a relatively affordable option. You will typically need to sell the invoices to the factor at a slight discount. However, you won’t be racking up interest or paying excessive fees. When used properly, this can be an affordable and reliable form of funding.
You Will Get Paid for Sales Faster
The main benefit of financing your receivables is that you don’t have to wait to get paid. If you are used to waiting 30 days or more for your customers to pay you, this is a great option. Think about what you could do if you had money now instead of months from now.
You Will Have an Easier Time Managing Receivables
In a similar vein, you will have a much easier time managing your receivables. In fact, the factor handles most of that for you. All you need to do is issue invoices and collect payment. Let your lender deal with working with your customers to settle their balances. You can focus on growing your business.
Get Started Today
Discover more today about invoice factoring and see if it is right for your business. This can be a highly valuable form of funding for companies in a wide variety of circumstances.