What are the key advantages of invoice factoring?
Businesses from all industries, need consistent streams of working capital to be able to meet daily expenses as well as fulfill their daily operations. Depending on industry, the sales or collection cycle on outstanding invoices can be lengthy. Industries that suffer from a long sales cycle, can oftentimes be hampered by their ability to collect from customers.
Industries such as staffing, facilities management, security firms, food & beverage manufacturers, consumer products and many more all operate with 30 to sometimes even 60 days of collection. A business with such a long collection cycle can benefit from the capability of being able to factor specific invoices to manage cash flows.
How does one apply for invoice factoring?
A company that is considering invoice factoring should conduct thorough research on how factoring works and contact invoice factoring companies that offer flexible terms.
Applying for factoring is not difficult, and most of the application process is performed by the factoring company.
Some of the required documents for review will likely include:
- A factoring application
- An accounts receivable aging report
- A copy of your Articles of Incorporation
- Invoices to factor
- Credit-worthy clients
- A business bank account
- A tax ID number
- A form of personal identification
What should be considered when shopping for an invoice factoring company?
Flexible terms, and a consultative approach are the most important factors when considering a factoring company.
The terms to consider mostly center around which invoices can be factored, and what is the agreed upon discount rate for the value of those invoices. Most factoring companies will discuss these options and consult on rates.
Invoice factoring is a financial service that requires a factoring company to collect invoices from the businesses’ customers. Due to this intimate knowledge of your business, and communication with your customers, when researching factoring companies, consider whether their factoring program is consultative and sensitive to your business needs.
CapFlow Funding Group provides a consultative, customized approach to its factoring services. To receive a risk-free complimentary consultation, fill out the quick form on our apply now page. https://capflowfunding.com/apply-now-funding/