Have you been waiting for several days for customers to pay you? If so, the Pennsylvania factoring company is at your service. The company has invoice accounts receivable financing and invoice factoring programs. The best thing is that you get funds on the same day and get to experience top-notch customer service. In a short while, we will discuss why you need the services of a reputable factoring company.
What is Invoice Factoring and how does it Work
Factoring is alternatively referred to as ‘debt factoring’ or ‘invoice factoring’. In a nutshell, it’s a financial product that allows businesses to sell their accounts receivable (unpaid invoices) to a factoring company.
An invoice factoring company purchases invoices at a certain percentage. The company then collects the invoice payments. Factoring is an excellent way of funding a business.
How Invoice Factoring works
In most cases, factoring companies provide funds in two installments. The first installment covers the bulk of the unpaid invoices, which help meet your need for instant cash. The second installment is paid once your customers pay for their invoices. They also deduct the factoring fee.
However, a factoring company will first cross-check your invoice details to determine if you are a suitable candidate for factoring services.
Why Would You Use Factoring?
Get instant cash flow
Most companies look for factoring services to fulfill their needs for instant cash. A factoring company offers consistent cash flow, and that enables businesses to run their operations smoothly.
Expansion and growth
If your company seems to grow faster than your cash reserves, it’s advisable to use invoice factoring to access instant cash to put up with your business demands.
Get missing capital
Banks have a limit on the amount they can give as loans via your line of credit. If your line is limited, you may not get all the capital you need to meet your business operations. In such a case, an invoice factoring company can chip in to provide missing capital.
Some customers may take one to three months to pay you. And slow payments will sabotage your business operations. However, accounts receivable financing can clean the unpaid invoices, allowing you to focus on your business growth.
If your business is a start-up, you might have exhausted all your money on it. But you will still need more money to keep it running. Invoice factoring is the best solution.
With a poor credit card, it’s impossible to get a bank loan, but you can get funds needed from an invoice factoring company. That’s because they focus on your customer’s credit, not yours.
Tax problems like liens only make it harder to get a bank loan. But invoice, factoring solutions can help fix your situation so that you get the capital you need.
If your company is going through bankruptcy, getting back on track could be an uphill task. But factoring services can help you recover from your current situation.
With high risk, the banks will turn down your request for a loan. That will make it hard for you to get the cash you need. Once you find yourself in this situation, it’s time to call a reputable invoice factoring company to come to your aid.