When you become involved with invoice factoring, a factoring company would purchase some or all of your invoices from you at a slightly reduced rate from their face value. This provides you with immediate cash for any business problems you need to solve, while the factor then assumes ownership of those invoices, and collects on them from your customers. Here are some of the advantages which accrue to a company that engages in invoice factoring.
Good Credit Not Needed
An invoice factoring company is not so much interested in your business credit history but is far more concerned with how promptly your customers pay their invoices. This means that you can have less-than-perfect business credit and still be approved for invoice factoring.
Once your company is approved for invoice factoring, you can be paid immediately for all the invoices that you sell to a factoring company. If you’re in need of quick cash, this could be an ideal solution, because you are routinely paid within one or two days for your invoices. Once you get the cash in your hands, you can use it for any business purpose whatsoever, and you will not have to specify what that purpose is to the factoring company.
No Collection Process
As mentioned above, once you sell your invoices to the factoring company, that company assumes ownership of the invoices and would then become obliged to collect on them. That means your company personnel no longer need to be involved with phone calls and mailing out late notices to customers.
Since a problem with cash flow will generally inhibit any company’s business growth, having a good steady cash flow will allow you to work toward the business growth you’ve always wanted. Because you’re not waiting for customers to pay you, you have the cash in hand to carry out improvements to your business which will result in growth.
Interested in invoice factoring?
Invoice factoring can provide your company with upfront cash, so as to relieve any budgetary stress you might be experiencing. Contact us at Norus Capital, so we can discuss the possibility of factoring with you.