Receivables factoring is a way for small and midsize businesses to generate working capital by selling their invoices (also know as A/R or accounts receivable). Simply put, we offer to purchase your invoice at a discount TODAY, injecting immediate capital into your business. In turn, we’ll wait for your customer to pay us in 30, 60, or 90 days.
Unlike traditional bank financing, receivables factoring only requires the invoice (or invoices) as collateral. The credit of the business owner is not relevant, and we can usually put cash in the hands of the business owner in 24-72 business hours!
Clients can use their funds for anything including general working capital to compensate for cash flow dips, equipment purchases, competitor acquisition, debt repayment, material purchases, and more.
Here’s an example of how it works. Let’s say you have completed work for Smith County and have invoiced them. You expect to be paid in 30 days, but you need that money now. By factoring, you can sell that invoice at a discount for working capital today, and the factoring company or investor will wait the 30 days to be paid by Smith County. It’s that simple.
The ability to factor an invoice is based on the creditworthiness of the CUSTOMER, not the creditworthiness of the business. Because of this factoring is popular to companies and business owners that have credit challenges or are otherwise unbankable.
If this sounds like a possible solution for your business, click HERE to fill out our contact form a schedule a conversation.