Factoring companies help your business grow. They provide the funds you need to keep your business afloat. Cash flow gaps, after all, are among the most common problems that plague SMEs. If you’re short on cash, look at invoice factoring companies and see the offers they have for you. If you’re unsure about it, here’s how factoring solutions help your company move forward.
Quick Access to Funds
Invoice factoring offers businesses quick access to cash. That’s a better alternative than what banks offer. Bank loans can take weeks or even months to process. Compare that to invoice financing that can provide funds in a matter of hours, if not a day or two. If you need cash and you need it now, you won’t have to worry about being rejected by banks. You can reach out to factoring companies instead.
Flexible Requirements
Banks have stringent requirements before they even accept your application for a loan. But many SMEs don’t have the paperwork to satisfy banks, so they are left with no choice but to look for alternatives. That’s why it’s a relief that companies can now turn to invoice factoring companies for help.
Clients with Good Credit
SMEs don’t even need to have excellent credit to get a loan. That’s because invoice factoring companies are more likely to consider the client and their payment history. It would be smart to choose a client that has never missed a payment before, so the invoice factoring firm can approve your financing request.
Takes Care of Collection
The invoice factoring company handles the collection once you hand the invoice over. That takes care of another item on your list. You can trust the factoring company to collect the payment, allowing you to focus on your core business.
Freedom to Use the Funds
Banks are strict about how companies use proceeds from a loan. But invoice factoring companies have no such restrictions. They allow companies to use the funds any way they see fit. So, if you need funds to fill in gaps in your cash flow, pay off employees, invest in new equipment, or pursue growth opportunities, you can go ahead with your plans. You don’t have to worry that the company may step in and prohibit how you use the funds.
No Collaterals
Loans often require collaterals. That’s how banks reduce the risk they take on with clients. However, invoice factoring companies require no collaterals. That means you don’t have to risk your assets—your equipment or property—to get the cash flow you need. When it comes to invoice factoring, your job is already done. You’ve sold the item. You have an invoice waiting to be paid. However, not all SMEs have the luxury or resources to wait the entire cycle until the invoice is paid.
No Debt
Invoice funding provides you with cash without you going into debt. Debt can be dangerous, especially for businesses. You may find it hard to pay back the debt if your sales drop. You have no such worries with invoice factoring.
