In today’s work world with its increasingly specialized business niches, we’re seeing an unprecedented surge of consulting companies across many industries. The result: more consulting start-ups, more revenue for consultants – and more competition. Consulting companies often face a specific set of financial challenges which can be addressed by factoring services. Here are five ways consulting companies can benefit from factoring services:
- Cash without debt
When some business owners, including consultants, need working capital, they often consider bank loans. However, they may not be in the position to add another line of debt. Loans also can also be tough to obtain for start-ups with little credit history or companies with little collateral or bad credit scores. On the other hand, factoring does not incur debt (it’s an advance, not a loan) and factoring companies don’t focus on applicants’ assets or credit history. A factoring company is more interested in the credit worthiness of an applicant’s customers. This can be beneficial to new or struggling consulting companies with good clients who pay regularly.
- Ability to meet financial obligations
In the consulting industry, it’s not uncommon to wait weeks or months to get paid. The problem with waiting 30, 60 or even 90 days is that this delay can put a huge strain on your company’s cash flow. Factoring services enable consultants to receive up to 90% of their invoice upfront so that they can meet their payroll, rent, transportation costs, and other financial obligations each month.
- Quick access to funds
One of the main benefits of factoring services is that you can collect your money right away for work you have already completed. Instead of waiting months, it can take as little as 24 hours to receive a large portion of your invoice total.
- Support services
When you partner with a factoring company, most companies can save you time and money with helpful back-office support. Many consulting businesses are small and even stretched thin, so you may not have a full administrative staff to handle preparing, mailing, tracking, and collecting on invoices. When you factor with a full-service, reputable factoring company, you can relax knowing that professionals are handling those support services. You can focus on your business instead of finding time to follow up with collections calls. Many factoring companies offer online portals where you can access your account 24/7, so you will know when your customers are paying.
- Resources for growth
A good factoring company not only can provide you with working capital for your fixed costs, but with your accelerated cash flow plan, you can begin to grow your business. With their advances on their invoices, a consulting firm can add new staff, upgrade technology, try out new marketing strategies, and take on clients with long payment terms.
Since Interstate Capital was founded in 1993, the company has partnered with consulting firms in a range of industries to help them grow and succeed — and they can help you, too. Contact Interstate Capital for an instant factoring rate quote today.