How does invoice factoring affect cash flow?
There are very few forms of business finance that have been around as long as factoring, and yet invoice factoring (also known as invoice discounting, A/R factoring or receivables financing) is not part of the common business lexicon for most B2B small business owners in the U.S.
Invoice factoring is a centuries-old business financing tool that originated when bankers would provide manufacturers with an advance on goods so that manufacturers did not have to wait for products to travel to far-away lands before taking on new business.
According to Wikipedia: “Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party – called a Factor – at a discount.”
The idea of invoice factoring might seem complicated, but it’s actually very simple. Accounts receivable are assets since they represent money that will – eventually – flow into an organization and which they can then reinvest in growing their business. Organizations choose to factor invoices with a company like Corsa Finance, instead of waiting for customers to pay, in order to expedite organizational cash flow.
How the process works to improve cash flow:
The biggest reason companies choose to factor invoices with a company like Corsa Finance is to unlock working capital tied up in invoices in order to expedite organizational cash flow. Companies that factor invoices with us receive same and next-day advances on invoices factored with us for a small fee called a factoring fee.
Expediting cash flow by factoring invoices can speed up business growth.
Sometimes businesses that invoice their customers wait weeks or even months to receive payment for invoices. So while they have assets on the books in the form of money owed to them via accounts receivable, they don’t actually have the ability to use that money to grow their business until the invoices have been paid.
Organizations that factor invoices with Corsa Finance pay just a small percentage to get access to 90% or more of the working capital that would otherwise be tied up in their accounts receivable on the same or next business day the invoice is factored.
That means that they have access to the working capital needed to meet payroll, fill the next customer’s order or money needed to take on bigger customers and larger orders, purchase equipment, expand inventory or services or execute other business growth strategies while we wait for the invoice to be paid, instead.
Apply or request a quick quote – either way, there is no cost, risk or obligation. Find out how much working capital your organization could unlock by leveraging your accounts receivables as an asset.
What type of organizations factor with us?
While most business owners in the U.S. are familiar with other types of business financing (such as bank business loans, small business loans, private investors or angel investors, etc.), invoice factoring is not a term many are familiar with outside of a few industries where factoring invoices is an every-day practice.
The team at Corsa Finance has decades of business financing experience with clients in a variety of industries; providing:
- Temporary employer and staffing agency factoring
- Factoring for specialty staffing agencies like nurse staffing, IT staffing and security services
- Supply chain factoring for manufacturers and distributors
- Factoring for landscapers and other local residential and commercial service contractors
- Contractors and businesses serving the energy and utility industries
- Factoring for manufacturers who sell through 3rd party e-commerce sites like Zulily and Amazon – and more
We work with factoring clients directly, but we also invite brokers to find out more about the benefits of working with us. Our commissions are competitive, and we pride ourselves on the high level of customer service we offer.
If you want to find out more about invoice factoring or find out whether it’s an appropriate business financing solution for your organization, contact us at 855-882-6772 or fill out our online application. We will process your application and provide you with a factoring proposal at no cost and no obligation.
Why Choose Corsa Finance for Invoice Factoring?
Organizations approved to factor invoices with us can receive funding as early as the same or the next business day. Approvals are fast and our rates are competitive. We offer non-recourse factoring, factoring with recourse and non-notification factoring, giving you more options to choose what is best for your business.
We don’t tack on additional fees. Add-on and administrative fees can significantly increase the real cost of factoring. When you factor with us there are no hidden fees:
- No application fees
- No notification fees
- No due diligence fees
- No credit check fees
- No reserve release fees
We want to earn your business as an invoice factoring client, so unlike many other factoring companies, we don’t require customers to commit to long-term contracts nor do we impose requirements like monthly minimums. In addition, we pride ourselves on our personal approach and the care we take with our customer relationships.