Manufacturing companies depend on invoice factoring to maintain a positive cash flow and dependable working capital. Manufacturers – whether small start-ups or established corporations – all share similar over-riding challenges: the need to buy raw materials, pay workers on time, and keep production lines going. Add to that the perennial goals for expanding the customer base, staying current with the competition, and planning ahead for new products and ways of doing business.
The problem comes when manufacturing companies must have the ready cash at hand to meet all those challenges, but their customers keep them waiting weeks or months after delivery for their payments. During that wait, manufacturers can face a cash flow crisis if they can’t make payroll or buy materials. They risk missing delivery deadlines – and losing their customers.
That’s when invoice factoring comes in. Factoring their accounts receivable with a factoring company closes the gap between when a manufacturing company submits an invoice to a customer for payment and the time that they actually get paid. With this early payment on invoices, the manufacturer has the working capital to keep the factory floor stocked with needed materials, maintain machinery, and pay their workforce. In addition, the cash infusion on work that’s already been completed means that manufacturers have the resources for improved marketing to sign more customers, research and development for profitable new product lines, working on larger contracts with longer payment terms, and other plans to grow the business.
If you work in this industry. here’s how the manufacturing factoring process works:
- After you deliver an order to a customer, submit that invoice to Interstate Capital.
- Interstate’s factoring professionals will verify the details of the shipment.
- You will receive an advance up to 95% of the invoice within 24 hours of delivery.
- Meanwhile, Interstate’s in-house collections staff is helping with getting that invoice paid.
You will receive the balance, minus a small factoring fee, when your customer pays the invoice total.
Factoring is an efficient and affordable funding solution for manufacturers that does not incur additional debt. For more information about how Interstate Capital can help you take your manufacturing company to the next level, get an instant factoring rate quote today.