Small business factoring: Your competitive advantage
Business loans are generally the first option companies think about when it comes to obtaining money for their growing firm. Yet business loans are not easy to obtain, especially for new, early-stage firms without a proven business history.
In addition to being difficult to obtain, the application for business loans is slow and time consuming. Many startups or rapid growth businesses simply don’t have the time to wait for a loan. Lastly, loans require taking on debt that can prove costly and difficult over time.
Factoring for small business can strengthen your cash flow
Invoice factoring for small business on the other hand is an alternative financing option that has a simple application process that does not require a good credit score or taking on any debt. By selling your receivables or invoices to a small business factoring company for a discount, usually for 8-20 percent of the value of the invoices, your business can collect on its invoice in days. Factoring for small business often eliminates the need to apply for a loan.
Business to business (B2B) firms in particular is ideal for small business invoice factoring. That is because the factoring company uses the credit assigned to your client as its determining criteria. So if you are a small business that provides a service or sells a product to a large corporation, you are likely a candidate for small business factoring.
What types of industries can take advantage of small business factoring? Most B2B firms qualify as do some business to consumer (B2C) enterprises. Consider the following, non-comprehensive list:
Manufacturing, including apparel & textiles, toys, furnishings, electronics, luxury and non-luxury goods,
Oil, gas and energy firms, including renewable energy
Business service companies, including accounting firms, law firms, business consultants, staffing firms, marketing and advertising agencies, etc.
Warehousing, distribution and wholesaling firms
Transportation companies including trucking, freight, rail and others
Telecommunications and technology companies
Government contracting & defense companies
Construction and building companies, including contractors, suppliers and subcontractors
Staffing firms including temporary employment agencies, contracting firms and more
Business to consumer (B2C) firms can also use invoice factoring for small business though not all factors may offer this type of financing. Medical receivables factoring, for instance, requires the factoring of several smaller value invoices at once instead of one large value invoice. This is one of the key differences between B2B and B2C small business invoice factoring.
The rewards of factoring for small business include:
Improved cash flow and overall business operations
Available working capital when you need it
Better planning and strategizing for your business because you no longer have to guess when payment will be received
Outsourcing your collections and account receivables duties
The limberness and flexibility to expand or move into new territories or channels
Cover operational expenses
Purchase or lease new equipment or technologies without having to obtain a loan
These are just a few examples of how small business factoring can help you grow your business without incurring debt from a traditional bank loan.
4709 N El Capitan Ave Ste 203, Fresno, CA, 93722
1202 Monte Vista Ave #20, Upland, CA, 91786
220 Ave I , Redondo Beach, California, 90277
5540 Centerview Drive, Raliegh, NC, 27606
6104 Browns Point Boulevard, NE, Tacoma, Washington, 98422
3100 Pinebrook Rd. Suite 2200, Park City, UT, 84098
813 Ridge Lake Blvd., Memphis, Tennessee, 38120
1090 Northchase Parkway, Suite 100,, Marietta, Georgia, 30067
4700 South State Street, Salt Lake City, Utah, 84107
1622 Sand Trap Lane, Eugene, Oregon, 97408
250 Yonge St #2201, Toronto, ON,
145 Pleasant Hill Ave N., Sebastopol, CA, 95472
330 Franklin Rd, Suite 135A-592, Brentwood, Tennessee, 37027
N48 W16866 Lisbon Rd, Menomonee, Wisconson, 53051