Clean house with janitorial factoring
It’s a dirty job but somebody has to fund it. That’s where janitorial factoring and financing come in. When banks say no to financing your janitorial, housekeeping or commercial cleaning business, janitorial factoring companies say yes. Whether your cleaning business is new or established, profitable or in the red, small or large, local or national, chances are your firm can find a janitorial factoring services company that will provide your business with funding.
Expand your territory with janitorial factoring services
Factoring receivables is not a loan and does not require a lengthy application or even a credit check against your business. What is does require is that your business has clients in good standing with excellent credit histories. Janitorial factoring relies on the creditworthiness of your customers and that’s pretty much it. So you have valid invoices to creditworthy clients, you meet the qualifications for janitorial factoring services.
How does the factoring receivables process work for those in the industrial cleaning and maintenance business? The factor purchases the invoices at a discounted price providing your company with capital in a matter of days. The price varies from competing janitorial factoring companies but it is generally in the range of 8-20 percent.
A breakdown: How janitorial services factoring works
So let’s say your invoice is for $50,000. When you sell it to the factor, you may collect $45,000 or the value of the invoice minus 10 percent. The percentage or “fee” goes to the factor to cover the costs of expediting payment and the risk of the financial transaction . Through non-recourse factoring only, the factor then takes on the responsibility of collecting payment from your customers.
The janitorial factoring services company then collects the invoice, usually 30, 45, or even 60-days later. In other words, the clients remit payment in the same manner they always do. The only difference is that the clients send their invoice payments directly to the factor.
What types of commercial cleaning companies use of janitorial factoring?
Residential cleaning companies
Business cleaning companies
Carpet, tile, grout and hard wood floor cleaning firms
Steam cleaning firms
Environmental, chemical free cleaning companies
Hospital-quality, disinfectant cleaning companies
Window cleaning firms
Maid service businesses
Flood and disaster restoration cleaning
Despite the dirt and grime, the janitorial and commercial cleaning industry can be a profitable undertaking. Almost every business and organization out there, from big corporations and mid-size firms to churches and schools, hires commercial cleaning crews.
Yet generating profit is challenging. Commercial cleaning companies must contend with high payroll costs, workers compensation issues, costs of machinery and equipment, supplies and cleaning products. Payment time lines can be long, which can negatively impact the bottom line and make growth or expansion seem out of reach.
Janitorial factoring services can put companies in control of their working capital and receivables so they can better manage their finances and business growth.