Today’s small and medium-sized businesses and startup companies have a wealth of options for fast working capital – but only one option provides them with value-added services without incurring debt: invoice factoring. Factoring firms buying invoices enable companies to convert the funds sitting in their stack of accounts receivable into cash in their checking accounts.
Factoring firms close the gap between completing a service or delivering a product and getting paid for it. By buying outstanding invoices, factoring companies help businesses in many different industries speed up their cash flow and set aside funds to expand their operations and become more profitable.
How Buying Invoices Works
When you factor your invoices, you can use the debt owed by your customers to get immediate capital instead of waiting 30, 60, even 90 days for the invoices to be paid. The good news is that factoring is an accessible cash flow option even if you do not have a strong credit score or collateral to guarantee a loan. Factoring works well for startups also as a long payment history is not required for qualification. Instead, factoring companies that buy invoices review your customers’ credit background to ensure that the customers will pay for the work you do for them.
You can factor receivables for any creditworthy B2B customers and leading factoring companies will allow you to factor as many invoices as you would like and choose which invoices to factor. Selling invoices to a factoring company is very popular in the trucking industry, as well as manufacturing, staffing, oilfield services, government contracting, wholesale distribution and service industries.
Factoring Firms Specialize in Buying Invoices
The benefits offered by top-tier factoring companies buying invoices can include:
- Fast and easy application process
- Faster cash flow by selling your invoices
- Payment on same day as paperwork is submitted
- Professional credit checking
- Time-saving collections services
- Personal account manager dedicated to your success
- Payment options, such as free ACH direct deposit
- Easy-to-use online site for tracking payment status
- Customized benefits tailored to your industry
- Improved credit scores
When you’re exploring selling your invoices for cash, think about the financial background and stability of a factoring company. You can often see a direct relationship between high factoring fees and unstable factoring companies.
If your factoring company is borrowing all its money at high rates, they will need to pass along their high cost of funds to clients. Factoring companies that must borrow money inevitably charge higher factoring fees and are less flexible than stronger, better-funded factoring companies.
Interstate Capital is one of North America’s leading invoice factoring companies, employing virtually no leverage and using its own capital in the ongoing funding of its clients. That gives Interstate Capital flexibility and the independence to make quick funding decisions without outside interference. You want to make sure your factoring company has the strength, stability, and flexibility to support your business today and as you grow in the future.
Since 1993, Interstate Capital has helped more than 10,000 business owners maintain a healthy cash flow by buying their unpaid invoices and advancing them the cash they need. When you’re ready to learn more from Interstate Capital’s friendly factoring professionals, contact us.