The automotive supply industry is a big part of North America’s economy – and always will be. Car manufacturing, repair, and maintenance represent a steady market for automotive supply companies. To keep up with industry demands, automotive supply factoring has evolved as the funding source of choice for many in this field.
By working with a top-tier factoring company, auto supply companies can turn their accounts receivable and purchase orders into immediate cash in their bank accounts. Wholesalers and distributors of auto parts and materials, as well as auto supplies manufacturers, rely on invoice factoring to help them stabilize their cash flow and grow their businesses.
Here’s how auto supply factoring would work for an automotive supplies distributor:
- The distributor delivers a truckload of products to a central warehouse for a chain of regional auto parts stores.
- The chain has negotiated 60-day payment terms to buy time for stores to receive the stock and sell it.
- The distributor submits the invoice for the products to their factoring company.
- The factoring company advances the distributor 90% of the value of the invoice.
- The factoring company collects on the invoice from the chain of stores in 60 days.
- The distributor receives the balance of the invoice amount, minus a small factoring fee.
Factoring is not a loan, so the distributor does not need to pay back the advance. The distributor simply receives payment early rather than waiting two months to get paid. The process is easy and fast. Factoring can also open up opportunities to significantly expand your business. When you are securely funded for today’s operations, you can begin to plan for tomorrow’s growth.
Benefits of Factoring for Automotive Suppliers
Interstate Capital, one of the top factoring companies in North America, has provided working capital financing to companies of all sizes and financial situations since 1993. You can use your unrestricted advances to increase your inventory, cover your payroll, manage bills, add new product lines or brands, improve your sales and marketing — whatever you can do to keep up with current operating costs and increase your profitability.
Here are some of the benefits that you can expect when you choose Interstate Capital as your funding partner:
- Fast approval and on-boarding as soon as you submit your paperwork
- Approval even if you’ve been turned down for loans before because Interstate looks at the creditworthiness of your customers, not our payment history
- Reliable and fast improvement in your cash flow
- Same-day funding
- Free credit checks and collections services
- Savings with volume discounts and early payment discounts from suppliers
Whether you’re importing tires, distributing vehicle parts to auto manufacturers, or selling to dealerships and auto repair shops, you can benefit from the automotive supply factoring services from Interstate Capital. Instead of waiting 30, 60 or even 90 days for your customers to pay you, you can rest assured that you will have a positive cash flow and meet payroll each month when you partner with Interstate. We can help you grow by purchasing your accounts receivable so that you have working capital on tap.
Contact us now to learn how our factoring services can help grow your automotive supply business. Call now for your instant factoring rate quote.