Factoring Invoices How It Can Help Grow Your Business

Hurry up and wait is a maxim that you must be familiar with if you own a business that sells products or services to the government or to commercial customers. That is what you always end up doing after delivering your services. Hurrying up and waiting up to 60 days is what you do just to get your invoices paid. But then you still have to cover the rent, employee salaries, and supplier payments. That’s right, hurry up and wait.

But this is a major challenge if you are a business owner. It will significantly slow down your growth. Why? When taking a large order, it’s not likely you can afford to wait months to get paid. It’s also not likely that you can afford to cover the rent, pay the staff, and buy the supplies. This is the reason why it’s a major challenge. And in many cases, it can drive you out of business.

Now the question is, what does a business owner do when he is facing a financial challenge. Most will hope for a business loan and go to the bank. But business loans are very hard to obtain and not very flexible. Plus, banks give loans based on your business past rather than your future opportunities. Often times, what you will need is a financing product that will focus on your true sales potential. And that product is invoice factoring.

Invoice factoring eliminates the 60-day payment wait, providing you with funds right after you invoice your client. Imagine this. Your product or service will be delivered to your customer. You no longer have to wait 60 days just to get paid because you will receive payment in 2 days. Any ideas how quickly you can grow? Or how many clients you would be able to take on?

How exactly does this factoring work? Actually, it’s quite simple. You send an invoice to your client and a copy to the factoring company once you have delivered your product. A substantial portion of your invoice will be advanced to you by the factoring company, usually within the day.

The factoring company’s advance gives you ! the brea thing room you want and the money you need to pay business expenses and take on new opportunities. Your business will then be allowed to grow because of this. The transaction is settled once your client pays their invoice to the factoring company.

Factoring is easy to obtain. The biggest requirement will involve you doing your business with solid credit worthy customers. That’s why you should consider factoring your invoices if you need financing and do business with great customers.

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