small business factoring

Small businesses are the backbone of our economy. Recent figures show that small businesses create two out of three new jobs and produce 16 times more patents per employee compared to large companies. Small businesses are where the innovation happens, but cash flow can often be a problem.

Challenges that Small Businesses Often Face

These small companies need to hire employees, invest in research and development as well as sell products or services, while often having to wait 30, 60 or 90 days for their clients to pay them. Other challenges that small businesses often face include dependence on a single client or two or the need for management to “work in the business instead of on the business.”

Invoice Factoring for Small Businesses

Invoice factoring is a financing method often used by small businesses. While companies of all sizes rely on factoring to speed up their cash flow, this alternative to traditional lending can benefit a young or growing company in particular. Bank loans can be difficult to get in the current economic climate and can take a long time. Some small businesses do not have the credit history or collateral needed to qualify for a bank loan. It is at this point that many business owners consider factoring.

How Invoice Factoring Helps Small Businesses

The factoring company will purchase your invoices and advance your small business a large portion of the invoice amount. This way, you no longer have to wait weeks or months to get paid, thereby instantly increasing your company’s working capital and improving its cash flow. The factoring company will then collect the payment from your clients on your behalf and forward the remaining amount, minus a small factoring fee, to you. This process also helps small businesses because it takes the administration involved with collections off your shoulders and puts it in the capable hands of professional collection agents.

Learn more about invoice factoring and how this risk-free, debt-free way can get your small business the money that is due to you on-time, every time. For more information, get free cash flow consultation today.

Since 1993, Interstate Capital has helped hundreds of small businesses improve their cash flow and increase their working capital. If you own a growing start-up or a small business with aspirations to grow and expand, partnering with Interstate Capital can put you in position to take your company to the next level. Contact Interstate Capital for a factoring rate quote today.