Invoice Factoring Company In Atlanta Offers Financial Relief To Small Businesses
An invoice factoring company is a resource many small businesses use during times when financial resources are tight.
An invoice factoring company doesn't act as a loan that you have to repay or that grows interest. There is no long-term commitment or complicated repayment plans. Rather, it uses a company's invoices to advance cash.
Businesses factor cash when they need it.
Factoring is one of the oldest forms of funding. It has existed for more than 3,000 years. Major companies, especially retailers, use it to advance funds on seasonal merchandise.
Here's how it works:
A company is waiting on a large customer to pay its invoice. Problem is, it has waited 30, 60 or 90 days. Meanwhile, the business struggles to pay payroll because it has not collected money from its clients. Or, it is unable to fund a critical expansion because it is short of everyday cash flow.
Invoice discounting offers a solution. Instead of getting a bank loan or accessing a line of credit, the company turns to an invoice factoring company. It sells their invoices to a factoring company at a discount in exchange for immediate cash.
The factoring company purchases the rights of the unpaid invoices, usually at a discount. The invoice factoring company provides the company with cash, often in a matter of a couple of days.
The company charges a small fee for factoring, but it is based on the industry, monthly volume, the credit of customers and how fast invoices turn.
There are many advantages. As a customer, you no longer have to "collect." Your client pays the invoice factoring company back and handles correspondence about the debt. There is no credit check involved.
Typically, they factoring company bases the invoice factoring on the credit worthiness of customers -- not the individual business. They prefer invoices of clients with good credit ratings and payment histories.
Selling invoices offers critcal cash at the right time. It gives businesses the cash they need, in advance, so companies don't have to deal with slow or late pays. And it allows businesses to concentrate on expansion instead of cash flow probems.
Your company might be a candidate for invoice factoring if you answer yes to these questions.
Are you lacking capital?
Do you have seasonal products and services?
Are you worried about funding your business or the stability of your clients?
Are you spending too much time chasing clients down for your invoices?
Invoice factoring may be an option for your company.
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