Factoring

Thousands of current and former clients have used Interstate Capital’s factoring services to grow their companies. They start with selling their accounts receivable to close the gap between completing a job and getting paid for it. Being able to have the funds they earned 30, 60, or even 90 days before their customers paid them meant greatly improved cash flow and money in hand for new opportunities. With their advances on unpaid invoices, these clients could start to invest in their own futures.

One of these Interstate Capital clients was a small start-up snack food distributor that started factoring with Interstate more than a decade ago. The distributor factored their first invoices shortly after they opened their doors.

Today that privately held wholesaler remains an Interstate Capital client and earns more than $30 million in revenue, thanks to their excellent products and savvy management.

Let’s call the company Pretzels and Popcorn. Although Pretzels and Popcorn is remarkably successful, selling to big box discount stores, drugstore chains, and a host of other retailers, the company continues to factor invoices from certain customers. Why? Here are a couple reasons:

  1. Freedom of choice: Interstate Capital permits clients to choose which invoices and which customers will be best for factoring and which will not. Clients know which customers will pay most quickly and can decide not to factor their invoices. Other customers, particularly some of the country’s largest-volume buyers of consumer goods, negotiate long payment terms, such as 45, 60, or even 90 days.

For a business like Pretzels and Popcorn, which has to balance paying suppliers for products while waiting for customers to pay for those products, factoring makes good sense with some customers. With Interstate Capital, clients get to choose which customers.

  1. Freedom from debt: Factoring is a reliable no-debt source of working capital. Unlike bank loans and lines of credit that must be paid back, factoring simply advances money that is already owed to the client. Pretzels and Popcorn can keep transactions simple with Interstate Capital funding them as soon as products are delivered.

The distributor does not owe the bank money – and does not have to complete borrowing-based reports every month or submit any paperwork outside of their invoices and proof of delivery. Interstate Capital does not ask Pretzels and Popcorn for their own financials and balance sheets – the factoring company is only concerned that the company’s customers will be reliable and creditworthy.

Pretzels and Popcorn started with Interstate Capital as their partner for growth and remains a valued client and friend. Interstate is ready to give your company freedom of choice and freedom from debt as you pursue your own business goals.

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