Working capital factoring allows you to efficiently grow your business by helping ensure that you have the capital you need to grow your business at your disposal. You can sell your businesses accounts to qualified lending institutions who will give you instant cash matching the amount of the accounts receivable. Instead of waiting 30 days or more to receive payment, you can get the cash flow necessary to buy new inventory, pay your bills, or cover other overhead expenses. Working capital factoring provides a steady flow of financing for your business.
On top of giving you access to cash that you need for your business, working capital factoring can help you collect on the accounts so you receive your payments much quicker. This also allows your employees to focus on other tasks that can be more beneficial to your business. Some lenders will also provide asset-based financing where they use your inventory and company equipment as collateral to secure a loan.
Working capital factoring gives businesses unlimited access to capital because the amount that can be borrowed through this method increases as sales increase. Utilizing factoring to obtain financing will also allow your business to take advantage of special early payment invoices provided by vendors. Many vendors will give you a discount if invoices are paid early, so in the long term it will save your business money.
Having the ability to pay on lines of credit early will also help your business credit score if the particular company reports to the business credit bureaus. Working capital factoring also appeals to businesses because the amount obtained does not add liability to the business.
Let your accounts receivable work for your business.