Invoice Funding Companies Help Business Meet Their Financial Obligations

Written by Economic Development Jobs on December 29, 2018. Posted in Factoring service for trucking, Freight capital factoring, Transportation factoring

This is the time of year when financially things can get tight. End of the month. End of the year.

If you are a small business then you likely know the stress of having to pay your company’s own bills when you are waiting for your own customers to pay theirs. Not wanting to risk your businesses credit rating or reputation you need to find access to the cash that you need while you wait for income that is owed to you. Business factoring services can help businesses of all sizes bridge the gap.

Often thought of as transportation factoring companies, it is important to note that business factoring companies help businesses outside of the transportation industry meet their own financial obligations while they wait for the customer payments to arrive.

Small Business Success Is Often Difficult to Achieve
With the use of advance business capital factoring many businesses are able to navigate the challenges of paying their own bills while they wait for the money that is owed them from their own customers. In fact, business factoring services are the only reason that some small companies are able to meet their own payroll needs while they wait for the income that is owned them. By providing upfront payments up to 90% of the original invoice, factoring companies help small businesses avoid waiting 60, 90, or even 180 days for payments from customers.

After checking out the credit worthiness of the billed customer, a business factoring company advances 70% to 90% of the invoice amount, according to the Wall Street Journal. When the bill is paid, the factor remits the balance, minus a transaction fee, which is also called a factoring fee. Knowing that there are nearly 28 million small businesses in the U.S., it should come as no surprise that there is a great need for these business factoring services. Smaller companies operate on a much smaller budget and, therefore, have a much smaller margin or error. Although a large corporation can make payroll when even one of the large customers pays, a smaller business does not often have this luxury.

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