Companies turning to this type of financing alternative receive immediate cash rather than wait for the entire duration of the credit terms offered to their clients. With access to enough money from cash flow lending, businesses in Dallas can build up their cash balance and pay any existing debt and pending obligations. Factoring companies in Dallas will help your business free up working capital tied to unpaid receivables. They will also take responsibility for the risk associated with those receivables and will chase payment directly from your clients if needed.
The Dallas and Fort Worth area has the largest number of corporate headquarters in the country, with more than 10,000 corporate headquarters and various fortune 500 companies. Additionally, businesses all across the U.S. are moving to the business-friendly state of Texas, into cities like Dallas, Austin, and Houston. This business influx is because the economic growth in Dallas is ideal for small businesses and startups. Dallas has a very diverse economy with lots of activity in high-tech areas of software and communications. As businesses in Dallas are experiencing unprecedented growth, businesses growing faster than their cash flow need financing. Unfortunately, most small companies don’t have the credit or history to qualify for traditional bank lending. Accounts receivable factoring is the ideal solution when bank financing isn’t an option. Invoice factoring is also an excellent financial tool for small to medium-sized B2B businesses.
Invoice factoring helps your cash flow, and it’s much easier to qualify and obtain because the funding decision will be based on the creditworthiness of your customers. Even if your personal credit is bad, a loan on receivables is still possible because a Dallas factoring company will focus on your receivables for collateral.
Sustaining healthy cash flow is the key to surviving and thriving in a stalled economy. Factoring companies offer invoice factoring services that give businesses of all sizes access to cash without the burden of taking out high-interest loans. Every business operator should understand what a factoring company does and how its services can give your business the boost that it needs to weather a financial storm or seize an awesome opportunity.
Many companies need only a certain amount of funding to get through temporary cash flow shortfalls. Even if they meet a bank’s stringent qualifications, taking out loans isn’t necessarily the best solution for them. Invoice factoring gives you the flexibility to get the cash that you need in a timely manner without having a loan and interest to repay.
Unlike trade credit that limits you to purchases from specific suppliers, invoice factoring gives you cash to use for any type of business expense. Some reputable suppliers offer discounts to businesses that pay for goods early. You can use cash advances from invoice factoring to avoid trade credit late penalties and even take advantage of early payment discounts from your suppliers.
Flexibility is one of the major benefits of factoring. Factoring is a great option for small businesses that frequently get rejected by banks for loans
Banks look at the creditworthiness of the small business and its owner to determine whether or not to loan money to the business. Your company doesn’t need a lengthy credit history to qualify for invoice factoring.
With bank loans, your company’s credit history is also used to establish loan amounts and interest rates. When you use invoice factoring services, the amount of money that you get is limited only by the number of qualified invoices that you’re willing to sell to the factoring company. There are no interest payments to make because invoice factoring doesn’t create loans.
Bank loans on balance sheets can make even established businesses look overextended. Large companies use invoice factoring services to weather short-term cash flow issues without placing more debt on their balance sheets. Invoice factoring not only makes these businesses more attractive to potential investors, but it allows them to keep their options open if they need bank loans for future large-scale initiatives.
A factoring company (or accounts receivable factoring) converts invoices sold on credit terms for immediate working capital at a discount. It has become a simple, fast and easy way to access business cash flow. In comparison with a traditional bank loan, a company that factors receivables has a quicker approval process.
1st Commercial Credit is a factoring company that specializes in evaluating accounts receivable and can make a prompt approval decision. The documentation requirements are not as lengthy, and the main requirement is that an applicant has invoices for work or orders that have already been satisfied. It also helps to have creditworthy customers. As long as a business has been in operation, meets revenue requirements and is free of liens or legal issues, approval is likelier.
Factoring companies buy discounted invoices at rates that are based mainly on the creditworthiness of their clients’ customers. After establishing their fee rates, factoring companies offer their clients cash advances that are up to 95 percent of the value of the sold invoices. The balances of the invoices are paid to business operators minus all fees when the factoring company receives full payments for the invoices.
Factoring companies also determine fee rates by the volume of invoices that a customer wants to sell. A business that has multiple invoices to factor will be rewarded with lower fee rates than those that only want to factor single invoices per transaction.