In today’s competitive economy, service providers of all kinds and all sizes are increasingly enlisting the help of service business factoring companies to help them with their needs for working capital. Whether you provide professional consulting services or you own a janitorial services firm, service providers can struggle during the gap between completing a job and getting paid for it. Even when you have a large sales pipeline and booked jobs, you might find it hard to make monthly payments when you’re waiting for clients to pay. This is when a factoring company can speed up your cash flow.
Service business factoring companies can purchase your invoices and pay you a large portion of their value upfront. When you convert the funds sitting in your accounts payable stack into cash in your pocket, you get the money you need for operating expenses without waiting weeks or months for your customers to pay you. One challenge that service providers face in seeking working capital is that they may not have valuable assets outside of their accounts receivable. This lack of collateral can make it difficult for service businesses to obtain traditional bank financing. While considered “tangible” from an accounting standpoint, accounts receivable typically have value only to the owner of the accounts. Banks prefer to lend against assets they can touch, see, and feel. In addition, some service providers, especially new start-ups, may not have a long credit history or a strong credit score. That can also become an obstacle for traditional loans and lines of credit.
Factoring companies that work with service providers recognize the value in a company’s accounts receivable. Unlike banks, accounts receivable factoring companies don’t evaluate applicants based on collateral, such as inventory, equipment, or real estate. Service business factoring companies also do not judge potential clients based on their credit background. Instead, the factoring specialists look at the creditworthiness of your customers.
For these reasons, service businesses have been coming to factoring companies like Interstate Capital for years to finance accounts receivable, even when their credit is less than perfect and they have no other assets to pledge as collateral. In addition Interstate Capital can function as your in-house credit department by following up on outstanding payments and factoring your accounts receivable immediately. Not only does this ensure that you can continue with your normal day-to-day business without worrying about outstanding payments, but you can focus on growing your company and taking on more customers, including those requiring long payment cycles.
As the services industry grows across North America, so have the number of factoring companies for service providers. Business owners can now compare services and choose the service business factoring company that best suits their needs. With factoring specialists that know your industry and understand your business model, Interstate Capital is ready to partner with your company for success today and growth in the future. Applying for factoring from Interstate Capital takes only a few moments, and funds can be available in as little as two to three business days. After the first funding, factoring your accounts receivable requires 24 hours or less. Contact Interstate Capital for your no-obligation factoring quote.