Keeping up with the demands of a successful business venture, while at the same time, trying to achieve ongoing growth can be quite challenging – even for the most seasoned professional. Whether it’s expanding to reach new market segments, opening additional locations, hiring more employees or whatever else the case may be, invoice factoring can provide the ideal solution to a business owner who is looking to grow his or her company. If you’re ready to take your business to a whole new level but are unsure where to begin, here are a few ways small business factoring can help.
What is Invoice Factoring?
As a small business owner, you’re probably well aware of the struggles associated with cash flow. Finding a way to fund operations and expansions without going completely in the red isn’t easy. In fact, finances are one of the biggest reasons small companies are unable to grow. So what are your options? Well, there’s always a business loan, assuming you can get approved and the interest rate makes it worth your while. Unfortunately, with banks tightening their belts and limiting the amount of funds they’re willing to extend to small business clients, this isn’t always a feasible option.
Enter small business factoring. Rather than relying on credit to create working capital, factoring for small business involves a cash payment in exchange for the purchase of your accounts receivables. There is no loan, no payments and no debt incurred. You simply receive an upfront payment for the amount of your customer invoices, minus a small fee.
Benefits of Small Business Factoring
Invoice factoring provides a number of distinct advantages over traditional funding options. Among these benefits include:
- Fast access to cash – No more waiting for bank executives or investors to make their decisions
- No additional debt – Access the cash you need to fund your business growth without the hassle of loan payments
- Fewer headaches – No more worrying about chasing your customers for payments
- Control and flexibility – Unlike loans and other forms of funding, you remain in total control over how much of your receivables you’d like to sell
- No interest – Factoring for small business does not involve any payments or interest
- No risk, less stress – Because invoice factoring doesn’t involve repayment, there’s no need to worry about how your business’ performance might play a role down the road
Taking the Next Step
You’ve worked hard to establish your small business and make it profitable. Now, the time has come for you to focus your efforts on growth and expansion. Invoice factoring can help you successfully achieve these goals and even exceed them without the worry or hassle of incurring more debt in the process. Getting started is easy. First, determine how much capital you need to raise in order to fund your proposed growth strategy.
With that number in mind, identify your slow paying customers and factor those accounts receivables. Then, choose an invoice factoring company with whom to work. Be sure to select a partner that has experience and a proven track record working with small businesses like yours. Finally, complete the necessary paperwork and receive your payment.
With the right kind of funding, you can focus your time and resources where they matter most: on taking your small business to the next level. If you think invoice factoring might be the right option for you, or you’d like to learn more about how this type of business funding works, contact us today!