Invoice factoring acts as a type of small business loan that uses company receivables as collateral. Invoice factoring is a financial tool businesses can use to get quick cash on outstanding invoices when they need it and not have to wait 30 to 90 days. This form of financing involves working with a third-party lender, a factoring company in Greensboro in this case, that will buy outstanding accounts receivable. This form of financing is an asset-based lending program where a company's accounts receivable acts as collateral.
Factoring companies will charge businesses factoring fees for each transaction and may buy accounts receivable at discounted rates. The process of invoice factoring is a quick and easy way to access cash in advance.
Invoice factoring gives you more control.
With factoring, you determine which invoices you will sell to the factoring company and when based on their cash flow needs. You are in total control and are also aware of the cost ahead of time and can factor it into their pricing.
Technology is making invoice factoring paperless.
Back in the day, copies of invoices needed to be submitted to and verified by the factor, which was a labor-intensive process. Today the increasing use and advancements in technology such as e-payment and e-invoicing make factoring easier and faster. Online portals make it easy for a factor to access and confirm invoices.
Other benefits of invoice factoring:
The staffing agency has to provide capital to fund payroll, pay for training, and cover other operational costs associated with the business. All these costs need to be taken care of before the client even pays the staffing agency. This situation often creates cash flow issues for the staffing company. They are expected to do all this before invoicing and receiving payment which sometimes can take weeks or months to arrive.
Bank loans might seem like the only funding option. But the reality is that a small staffing agency owner can't always qualify for that option. A bank loan usually takes a long time to process, even for an established business with an excellent credit score, before allowing you to access the funds. Payroll funding is vital to companies in the staffing industry because it involves an achievable, fast and straightforward process. You can apply and receive funds all in 3 to 5 business days.
1st Commercial Credit has worked with this industry in Greensboro for many years and can offer lending solutions for staffing companies. With factoring, your business will have immediate access to the working capital needed to cover business expenses.
Factoring is a steady form of obtaining cash. It can be a short-term or long-term solution depending on your Greensboro business needs and your invoice management. 1st Commercial Credit offers the utmost flexibility by letting you choose and pick the invoice or invoices you want to sell. We also provide access to invoices and reports through our secure online platform 24/7.
There are many reasons why 1st Commercial Credit stands out from all other financial institutions in Greensboro. Once your staffing firm is established with us, you can begin borrowing money for your staffing agency and have access to some of the key benefits, including:
Most manufacturing companies need some form of financing to grow and cover regular expenses, such as equipment leases, raw material suppliers, rent, and staffing costs. These expenses add up quickly and have pressing due dates. However, the revenues often come slowly because most clients ask for payment terms ranging from 30 to 90 days.
Receivable factoring in the manufacturing industry is popular because it allows any manufacturing facility to secure financing, regardless of its size or years in operation.