Landscaping contractors, just like any other seasonal business can struggle during the off-season trying to meet payroll, retain their core staff and repair or replace damaged equipment. This can be especially true for commercial landscapers who usually have to wait 30 to 60 or even 90 days to receive payment. This means even though the invoices were issued at the height of the busy season, a landscaping contractor can be well into the slow season before they start receiving those payments. Invoice factoring financing can help them maintain steady cash flow throughout the off-season.
With invoice factoring financing, you sell unpaid invoices to a factoring provider, referred to as the factor, at a discounted rate. Those invoices are then owed to the factor. Once the invoices are paid, the factor will send the business owner the remaining balance minus a small fee
At the end of a busy landscaping season, working capital levels are high. As the workload starts to taper off, so does the cash flow. It is not uncommon for landscaping contractors to have to tap into that capital to keep up with operating expenses in the off-season. A lack of sufficient working capital can leave a business vulnerable in the case of an emergency or a business opportunity that requires additional staff or new equipment.
Sufficient working capital is equally important as the off-season ends and landscaping contractors start gearing up for the busy season. Equipment may need to be repaired or replaced and with the influx of work, additional staff will need to be hired. Covering these expenses can be difficult if a business owner has been chipping away that capital all winter. Invoice factoring allows for the preservation of working capital and helps keep the revenue stream flowing without any major disruption.
Not only can invoice factoring financing can be the perfect solution to keep your landscaping business on track all year long but it also provides benefits that traditional business loans don’t.
Access to immediate cash. Applying for a traditional business loan can take weeks or longer. With invoice factoring financing, you can typically be approved and receive funds in days instead of weeks. Factoring eliminates waiting for invoices to be paid or a bank loan to be approved and allows you to get the cash you need now.
Perfect credit not required. With invoice factoring, less than perfect credit isn’t a problem. Approval is based on the creditworthiness of the customers whose invoices you submit for factoring. When choosing invoices to factor, it’s important to pick those issued to customers with a consistent payment history.
Avoid taking on additional debt. Invoice factoring is not a loan so it will not add additional debt to your balance sheet. Factoring simply gives you quick access to funds that are already owed to you. It also allows you to keep other funding options open should you need them.
Fund business growth. Whenever a business opportunity comes along, a business owner needs to have the cash on hand to take advantage of it. Whether it’s new equipment or additional business, you need to have sufficient working capital to invest in that opportunity and promote business growth.
If you’re a commercial landscaping contractor who needs a little help surviving the off-season, CapFlow Funding Group may be able to help. Let’s talk. We specialize in factoring and will work with you to find the best funding solution to provide your business with immediate working capital. We service many different industries with a variety of different funding needs. Contact us today and find out how invoice factoring can help grow your small business.
