Our Factoring Company Works to Your Business’s Advantage
Written by US Funding on October 6, 2015
As the owner or manager of your successful small business, exactly how much do you know and understand about the role of a trustworthy factoring company in ensuring your continued success? Are you familiar with the situations in which factoring is a healthy decision for your company? Can you describe the factoring process to your investors or board members so they understand factoring’s overall benefits? US Funding offers this primer on the advantages of factoring for your edification.
Situations in Which to Consider Factoring
- If you are a recent start-up and suddenly land a very large customer, but you don’t have the capital to fulfill that order, what can you do? Filling the order would give you important credibility in the marketplace and bring in needed revenue for growth. However, you probably are not in a position, yet, to get a bank loan with favorable terms, and most likely your investors have already supplied all they can at this point to get things up and running.
- Maybe your company has a steady flow of business, but existing customers are slow at paying their invoices. They may be taking 60 or 90 days to pay, even though your terms clearly were based on 30-day payments. While you know they will eventually come through with the full amounts, meanwhile you are straining to meet your own obligations to make payroll and pay suppliers and you have to turn away orders you can’t fulfill.
There are many other scenarios in which expected income is not keeping up with needed capital. The point is, when you have outstanding invoices for products or services that have been delivered, but you do not have enough cash on hand to pay your own bills, there is a viable, legitimate answer.
How Factoring Works
- Your customers order products or services from your company.
- You produce and deliver the items or perform the services. Your customers are satisfied with the work, so you send invoices for the amounts that they owe. Let’s use a total of $100,000 worth of invoices as an example.
- You need capital sooner than the anticipated 60-to-90 days your customers will take to pay you, so you sell those invoices to US Funding for an immediate infusion of cash.
- We will pay 85 percent to you immediately. That’s $85,000 to use for payroll or to pay your vendors or to implement sales and marketing tactics to grow your business – whatever you need.
- We then proceed to collect the invoiced amounts from your customers as they are able to pay. When those invoices are paid – in 30 or 60 or 90 days – we send the remaining $15,000 to you, minus a previously-agreed fee.
It really is as simple, and reliable, and legitimate as that.
Use US Funding’s factoring services now to obtain capital immediately without incurring new debt. Rely on factoring to give you needed peace of mind.