Can factoring help startup companies?

Startup companies face unique financial challenges, as most entrepreneurs quickly find out. They work hard day and night, their business plans are solid, and the market is there for their products or services, but that’s not enough for success. Even if a new business owner has a pipeline of customers, keeping a positive cash flow can be difficult. Many new businesses never make it past their first year.

New business owners will often find closed doors at traditional lending sources, such as banks and the Small Business Administration. Most institutions – even the business owner’s personal long-time bank – provide working capital loans and lines of credit to established companies with longer credit histories. In addition, predatory high-interest loans from online lenders and merchant cash advance companies have put many new companies out of business before they ever get a chance to grow.

Fortunately, invoice factoring firms offer a tried-and-true funding alternative for startups: fast cash, regardless of your or your new company’s credit history. These arrangements work well because, first, you give up no equity and second, you incur no debt. Factoring your invoices simply gives you an advance payment on work that has been completed. You don’t have to prove to a finance company or investors how or when you will be able to pay back any advance because invoice factoring is not a loan.

A factoring company can also help your business get started with credit checks on customers, collections services, and other benefits, such as assistance with payroll services and insurance providers. When you factor your invoices, your startup company has funds to pay staff and suppliers, order needed equipment, increase your marketing – everything you need for a strong start. You’ll quickly build a strong credit score and a good reputation with your timely payments

Interstate Capital, one of North America’s top invoice factoring companies since 1993, has helped thousands of new and growing businesses through their early years. Many stick with Interstate Capital because getting paid immediately rather than waiting for months makes good business sense for companies at any age. The startup factoring specialists at Interstate can help your company become more profitable in less time.