Buying Invoices: With banks not in the giving mood when it comes to bank factoring (or lending money to businesses), factoring firms are buying invoices and helping fund businesses all around the world. Rather than taking out a loan, businesses can use the debt owed to them by their customers to get immediate capital instead of waiting for the invoices to be paid. The companies that do this buy invoices at a discount but finance your company within days.
Traditional bank loans require a ton of paperwork, great credit standing, and a host of other intricacies. These loans often come with high interest rates that can create more problems than the loan fixes. Other lines of credit, too, are often not an option for many companies. Factoring invoices, however, requires just the business that you have already done.
Unlike loans which can be denied based on your credit worthiness, factoring firms that buy invoices are more concerned with that of your customers. Since you are essentially selling them the invoices, your customers will be the ones that pay them. This means that this is the perfect option for businesses that do not have a good enough credit history. Assuming your customers are in decent standing, and all of the invoices are paid off within a predetermined period of time, you can factor receivables as much as you like for as long as you like.
Buying Invoices is available to both large and small businesses but is particularly popular with businesses that regularly need to cover a large payroll. Any industry that is based on employing many people at once (I.e. Manufacturing, service industry, trucking) is likely filled with companies using this exact method to keep their business in the green. Others are using this service as a way of raising venture capital when other options are not available.
Buying Invoices Video
Why should you care about the stability of a factoring company when buying invoices? There is almost always a direct relationship between high factoring fees and unstable factoring companies.
If your factoring company is borrowing all its money at high rates, they are passing their high cost of funds along to you. Factoring companies that borrow lots of money inevitably charge higher factoring fees and are less flexible than stronger factoring companies when clients are buying invoices.
Interstate Capital is one of North America’s best capitalized invoice factoring companies, employing virtually no leverage and employing its own capital in the ongoing funding of its clients. That gives Interstate Capital lots of flexibility when competing for your business.
Our typical clients pay us only pennies on their sales dollar when buying invoices and can be assured there are no outsiders pulling our strings. We make decisions quickly and decisively. You want to make sure your factoring company has the strength, stability, and flexibility to take care of you today and as you grow in the future. Buying invoices has never been easier.
Interstate Capital maintains eight figures of untapped liquidity at all times to ensure we have the resources to increase your availability as you grow. We’ve been in business nearly 20 years, through multiple business cycles. We’ve funded billions of dollars of buyer invoices for over 4,000 clients.