Commercial Invoice Factoring

The Benefits of Commercial Invoice Factoring


When a business makes a sale on credit there is usually a delay of 30, 60 or even 90 days before they are paid. This can make it difficult to keep enough cash flow, as businesses are basically waiting around for their customers to pay their bills. This can make it tough to pay suppliers, employees or even to keep the doors open. Luckily, businesses have some options to get the cash they need right away, so they don’t have to wait for that long sale to collection delay. Commercial invoice factoring is one way a business can avoid the problems that come when customers don’t pay right away. Before getting into the benefits of this service you should know what it is and how it works.


What is Commercial Invoice Factoring?

Commercial factoring is a process by which a third party buys invoices and receivables from a business and gives them immediate payment. Instead of waiting 30, 60 or even 90 days to get paid, the business can get paid up front for their services. The factoring company charges a small fee for the service and is then in charge of collecting the money from the people that owe. In most cases, invoice factoring is only an option if you have customers that normally pay on time. It is not a way to protect yourself against customers that don’t pay, as most factoring companies will not offer money to businesses that have customers with poor credit.


Benefits of Commercial Invoice Factoring

There are some distinct benefits to using commercial invoice factoring. Here are some of the biggest benefits of this service:


-Immediate cash without waiting: it can be very frustrating to have to wait for your customers to pay you. This is especially true if you need that cash to keep your operations going. Commercial invoice factoring allows you to get the money you need without waiting for your customers to pay. This is very important for businesses that are just starting out or ones that have an unexpected expense that they cannot cover.


-You will get a credit analysis of your customers: Before a factoring company will give you the money they need they will do some background checks on your customers, including their credit rating. This helps them determine how much risk they are taking on by purchasing your invoices or receivables. You will get access to this information, which will help you when you do future business with that client.


-It is not a loan: Instead of getting a loan from a traditional lender like a bank, you will really be getting the money based on your client’s credit. This means that your business does not need to have the greatest credit to get the money it needs. Even a young company with a poor credit history can get commercial factoring as long as they have customers with good credit.Commmercial Factoring


-You will get additional services: In addition to getting same day funding you will also get a number of other benefits. There will not be a term contract, and you will also get free credit and collections services that will give you more time to focus on the important things.


Get Started Now

If you start using commercial invoice factoring you can get the working capital you need without taking on a bunch of extra debt. It may even allow you to get early payment discounts from your suppliers, as you will always be able to pay them on time. You can purchase the equipment you need or take care of unexpected expenses that might pop up. If you own a business that could take advantage of these services then you should definitely consider commercial factoring.