Propel your business forward with automotive industry factoring
Drivers on the road today probably know the make and model of their most-current car, truck or SUV regardless of whether they drive a Ford, Chevy or BMW. Yet few know the names of the small businesses behind the big brands, the parts suppliers, manufacturers, distributors and others that are responsible for the complete production of the vehicle.Read More
Though these companies are not well known, hundreds of them across the country are involved in the larger car manufacturing process. These small firms might manufacture transmission components, engines and engine parts, body parts, fenders, rims, tires, electronics, braking systems, and steering and suspension components. They also comprise of the companies responsible for distribution and reselling, dealerships, and wholesaling. Even car and truck accessories, such as windshield wipers, floor mats, cup holders, car stereos, headlights, and dashboard-bobble heads, rely on small business suppliers.
Gear up with automotive financing companies
Despite their value to big auto manufacturers, it is a tough time to be in the automotive supply business. The larger industry was hit hard years ago by the Great Recession and, while recovering, cash reserves have been depleted. Business remains slow with suppliers heavily bearing the brunt of this decline. Slow business means slow payment from auto manufacturers.
Get in the fast lane by factoring automotive suppliers
Fortunately automotive suppliers can get in the driver’s seat of their finances with options such as automotive industry factoring. If auto manufacturers, auto parts retailers, national dealerships and other large firms are your customers, you’re more than likely qualify for automotive industry factoring. By selling your unpaid invoices or purchase orders to automotive financing companies, you can collect on payment owed to you in only a few short days. This is several weeks sooner than the 30, 45, or even 60 days it would normally take.
The advantages of automotive industry factoring include:
- Be able to take on larger orders from new and existing customers
- Improve the supply chain movement
- Obtain a discount on materials by buying in bulk
- Improve cash flow so your business can operate efficiently with minimal waste
- Cover business operations costs, including overhead, payroll, insurance, materials, energy costs, equipment and more
- Gained peace of mind that comes from not having to worry about bill collection and receiving payment
The costs of working with automotive factoring companies fluctuate but they are generally between 80 to 92 percent of total invoice value. This cost covers the risk the automotive financing companies take on as well as for expediting invoice payment. Qualification terms can also vary but as long as your client has a good credit score, chances are good your company qualifies for automotive industry factoring.
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