How Can Small Business Factoring Help You?
Written by moxysupport on August 25, 2015
Do you have your hands full just managing ongoing operations or efficient production at your small business? Are you challenged to increase your marketing efforts and grow those sales numbers? Does the thought of having to make payroll or pay outstanding bills make you nervous, while you wait for customers to send payment of their own 30-, 60- or 90-day-old invoices? At US Funding, we can help you solve the cash flow problems with small business factoring and it will free up your time to address the other responsibilities of running your company.
It’s no secret that the recent economic environment has presented its financial challenges. If your company isn’t rolling in mountains of extra cash (and whose is?), your bottom line may be suffering from the disparity in the time lapse between sending out invoices to your customers and when their payment reaches your bank account. That is where small business factoring can save the day for your small business.
Small Business Factoring in a Nutshell
What exactly is small business factoring? Basically, small business factoring is selling some of your outstanding invoice receivables to get needed cash upfront in order to operate your company. It works like this:
- Select the unpaid invoices of those customers who owe the highest amounts, those who habitually take longer to pay in full, or those whom you simply do not want to have to use valuable time to monitor and remind.
- Sell these accounts receivables to US Funding – creating a working agreement called small business factoring or invoice factoring or accounts receivable factoring – for a little less than their total face value, often receiving as much as 85 percent.
- Receive this cash immediately, to use in any way you wish. You can make this month’s payroll, buy needed equipment, invest in inventory, pump up marketing tactics, or anything your small business needs to grow and be successful.
- We will alert the customers identified in your small business factoring arrangement that we are handling billing for your company and future payments should be made to US Funding. We will be responsible for collecting everything that is owed to your company.
- When your customers who were included in the small business factoring agreement eventually pay their invoices, you will receive the amount that remains owed to you, minus our agreed-upon fee for handing the transaction.
For example – You sell us $200,000 of accounts receivable now. We give you $170,000 for your immediate use. Your customers eventually pay their bills and we send you the remaining $30,000 minus our fee for administering the small business factoring contract.
You don’t have to go to a bank to borrow the amount you need to get over a little financial hump, which would entail a lot of paperwork, much valuable waiting time and added debt. Plus, you have the added benefit of having US Funding in charge of collecting invoices and processing payments instead of you.
Contact us today to discuss how we can help you this month.