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Benefits of Small Business Invoice Factoring

Small business invoice factoring helps reduce the average number of days you spend waiting on customer payments from weeks or months to none at all.

Take control of cash flow – get paid up to 95% of the invoice amount within 1-2 business days (or less) from the time you generate a customer invoice
Reduce overhead in the form of time and resources spent chasing customer payments
Cut operational expenses by taking advantage of suppliers’ quick pay discounts
Increase your ability to take on new business more quickly or serve larger accounts
Use generous payment terms as a competitive advantage to attract and retain customers

Whether you’re already factoring invoices, comparing small business invoice factoring companies, or simply exploring small business financing solutions, request a free, no-risk-or-obligation quote, and we’ll work to help you find the ideal option.

Use invoice factoring to take control of cash flow.

Factoring as a Small Business Cash Flow Financing Solution

Small business invoice factoring is sometimes also referred to as cash flow financing or debt financing. Factoring is a financing tool that enables small businesses to leverage customer debt (unpaid receivable invoices) to access working capital – or cash flow. By improving cash flow, small companies can take on new business, meet financial obligations, and reinvest in their business more quickly.

Within days (or even hours), a small business factoring invoices can access money that might otherwise be tied up in customer invoices for 30-45 days or even longer. With cash in hand, they can reinvest in their business immediately. Instead of waiting on customer payments, they can create a more consistent, predictable cash flow.

Minimizing the costs of this cash flow financing solution is the key to getting the most benefit from small business invoice factoring. Fees and costs directly impact the amount of cash flow unlocked when a small business factors invoices instead of waiting for customers to pay. From the cost of receivables financing (the factoring fee) to add-on fees that small business factoring companies might tack on, the more a small business pays for factoring services, the less effective it is as a cash flow financing solution.

The benefits of small business invoice factoring are particularly suited for SMBs (small and mid-sized businesses). Explore factoring financing options that include the following features:

Fees as low as 1%
Fast funding – as little as 1 business day
High advance rates with low holdbacks
No upfront fees
No long-term contracts
No factoring minimums -you choose which invoices to factor
No add-on or hidden fees
No application or due diligence fees
Financing without taking on debt
Friendly, professional customer service

Whether your small business is exploring the potential cash flow benefits of factoring invoices or you’re already factoring and want to be sure you have the best program in place, we encourage you to request a free, no-obligation quote. Unlock working capital and take advantage of the benefits of small business invoice factoring.

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How the Benefits of Small Business Invoice Factoring Can Help Your Company Grow

1. Expedited Cash Flow

Having adequate cash flow for expenses and growth is important for every business, but it’s absolutely essential for young startups and small businesses. For that reason, speeding up cash flow is often the primary reason a small business would use receivables financing. A small business factoring invoices can get up to 90% of the amount of a customer invoice within hours or days of when the invoice is generated, without affecting customer payment terms. Instead of waiting weeks or months on payment, they can stay focused on growing and running their company.

For example, imagine that a small business filled an order and they are going to bill their customer for $25,000, net due in 60 days. Instead of waiting 60 days (or even longer) for the customer to pay, they decide to factor the invoice (or sell it to a small business factoring company). Assuming a factoring fee of 5%, and an advance rate of 90%, here’s how it would work:

Overview
Day 1	Generate a $25,000 customer invoice and factor it
– Same/Next Business Day	Receive an advance of $23,750 (95% advance)
	Factoring company earns $750 (3% factoring fee)
Day 30+	Your company also receives the reserve amount after the invoice is paid

2. Reduced Expenses

Small business invoice factoring can help cut operational expenses. Speeding up cash flow, itself, creates additional benefits for small companies that use receivables financing. Some of these include:

Having cash on hand provides leverage to ask for (or take advantage of) cash and fast-pay discounts from vendors and suppliers
Avoiding unnecessary interest charges or penalties for late payments while waiting on receivables to turn
Reducing the amount of time and resources needed for accounts receivable activities, including bookkeeping, invoicing and collections

When deciding whether receivables financing would benefit your business, look at the whole picture.

A low factoring fee might actually be a bargain when stacked up against supplier quick-pay discounts, interest charges and late payment fees, and the cost of time spent on receivables financing tasks.

We understand the unique needs of small businesses. We can create a program tailored to your needs and preferences, and which enables you to get the most benefit from receivables financing.

3. Faster Growth

Small business invoice factoring can help you grow your business more quickly. A small business with slow cash flow may find they can’t take on new business quickly enough to grow. They might find it difficult to take on big orders or effectively service large customers. They might find it excruciating to have to stand on the sidelines if an unexpected opportunity presents itself but they simply don’t have the working capital needed to jump on it.

Factoring invoices enables you to unlock the working capital represented in your unpaid customer invoices as soon as same day an invoice is generated. This could make it possible for you to:

Extend super-generous terms to your customers as a competitive advantage
Replenish inventory and acquire supplies and materials you need to take on new business more quickly
Add assets, inventory, or resources you need to take on bigger accounts
Take on bigger accounts – who often dictate payment terms to their suppliers of 60-90 days – without slowing down cash flow
Take advantage of fast-emerging opportunities
Quickly respond to marketplace changes or competitor’s moves

Request a free, no-obligation quote to get the process started.