Consultants factoring is a popular alternative financing solutions for growing consulting firms. Consulting companies rely on regular revenues to keep their doors open and expand their businesses. As a consultant, you may often need to wait a long time to get paid by a client. Many consultants have a strong pipeline of accounts receivable, but have to wait 30, 60, or 90 days for payment.
Traditionally, some consultants have had to take out bank loans and incur significant debt to meet payroll and other obligations while waiting to be paid. Today, this solution is becoming less common as bank loans become harder to obtain – and more consulting firms are turning to factoring to solve their cash flow challenges. Instead of adding strain to your business by waiting weeks or months for payment, you can partner with Interstate Capital, one of the most trusted consultants factoring services firms in the industry.
How Consultants Benefit from Factoring Services
Consultants generally have a wider range of expenses than traditional companies. Things such as office rentals, equipment hire and outsourcing a range of solutions. These companies, in particular new start-ups and technology-based companies, are usually driven by people with a niche range of skills and experience, but they don’t always have the capital to cover their overheads if they are waiting for their clients to pay them.
As in many industries, consultants often have to wait 30, 60 or 90 days for their clients to pay them. If your clients are large organizations, then you might even be waiting longer because multiple people in the hierarchy have to approve and sign off on your invoices. While this may not seem like a problem for your clients, it can put you under a lot of financial strain because your suppliers and staff can’t be expected to wait for your clients to pay you before you are able to reimburse them or pay their wages.
When to Consider Invoice Factoring
If slow invoice payment cycles are common in your business, then invoice factoring is definitely something that you should consider. This will enable you to build up the cash reserve that you need to grow your business, take advantage of new opportunities in your industry, exploit supplier discounts and more.
One of the reasons why consultants choose invoice factoring over bank loans is because this allows them to avoid incurring debt. A factoring company will research the credit history of your business as opposed to the creditworthiness of your consultancy.
How Invoice Factoring can help your Consultancy
Besides the obvious benefit of getting access to cash more quickly, you can also benefit from a range of value-added services that many factoring companies offer. These service include professional collections, online credit checks of your clients, payroll services and more. Make sure you speak to any potential factoring company that you are considering hiring to find out what type of additional services they offer.
About Interstate Capital
Interstate Capital has funded over 10,000 companies since 1993, making it one of the oldest and largest factoring companies in the alternative funding market. Interstate purchases nearly $1 billion dollars of invoices annually from hundreds of clients in a wide range of industries throughout North America and each client receives individual attention from a dedicated account manager. Get in touch with us so that you can learn more about the factoring programs designed for consulting firms. Let us customize a program for you.