Have you ever run out of working capital because you landed a new contract or had sales rapidly increase. Not fun. And not the best time to begin looking for money. Did you get a great offer from you bank? Or was it an extremely expensive offer from an advance lender?
Be wise. Prepare for growth. Get setup with invoice factoring and factor only when you need to. It saves you money and allows you to keep growing.
Invoice factoring is a process that enables businesses to get immediate cash by selling their outstanding invoices.
Invoice factoring works well for businesses that receive invoices from good sources. These invoices are useful for borrowing up to 90% of the face value until the invoice is paid. When the invoice is paid, the lenders is paid their money back plus the determined points. Your company has access to working capital to continue to grow.
EXAMPLE:
Company X performs services to the government. They issue an invoice that has a 45-day due date. The government usually pays within 45 days. The invoice is for $30,000.
Company X factors this invoice and receives $27,000 to use as working capital. The governments pays the invoice after 30 days. They pay $30,000. The factoring lenders receives $27,000 plus two points ($540). Company X receives $2,460. Company X received a total of $29,460 on the invoice.