Is Invoice Funding Right for You?
Written by US Funding on January 21, 2016
When it comes to financial terms and procedures, things can get complicated quickly. Invoice funding is no exception. At US Funding, our aim is to un-complicate matters for our clients. We want to explain what we do in a simple way and why a particular service of ours is exactly what your successful small business needs. In this article, we dive into the ins and outs of invoice funding. Let’s begin!
Simply put, invoice funding is a way to “collect cash on outstanding invoices” when there are temporary income shortfalls. In a perfect world, customers always pay their bills on time and just seconds after the invoice is sent, it is paid. We, however, do not live in a perfect world and frequently, there are timing differences. Your customer doesn’t pay on time, and your business is left strapped for cash. The cash for invoice funding come from a third party who purchases the invoices you created, provides you with the money up-front so you can pay your bills, collects the payments from your customers and gives you a final payment minus a small fee. There is no loan, no credit check on your business.
Is invoice funding right for your small business?
First of all, invoice funding is a way for your firm to pay for short-term cash flow insufficiencies. It allows you to collect the receivables that you have on your books, so that you eliminate the waiting period until your customers pay. You take on no bank loan, nor do you have to wait for a long credit check before approval. Consider the advantages over a bank loan.
Advantages of Invoice Funding
Flexibility—you can determine the frequency with which you want to sell your receivables. Once you are set up to receive funding, you can sell us invoices on a weekly, monthly or custom schedule. Whatever you need to run your business, we are there to help.
Fast Service—there is a short turnaround period and you receive the cash you need quickly. We understand that a business needs daily operating cash to continue to grow.
No Credit Check on your Business—we are only interested in collecting the receivables that you sell to us. The invoices must be legitimate, current and with customers who maintain good payment record.
No Added Loans Payable on Your Balance Sheet—your investors and board members will be happy that you have incurred no additional debt. Your customers owe the money to US Funding and not your business.
Collection of Receivables is No Longer Your Responsibility—it is up to us to collect the receivables from your customers.
You are Free to Expand Your Business—with the elimination of the waiting period to collect your receivables, you now have cash available when an opportunity arises to expand or promote your business. Opportunities that you may have had to pass up, when cash was not available.
If you have any questions regarding our specific policies or if you have general questions regarding invoice funding, please do not hesitate to contact us at US Funding by calling (866) 812-9771 today.