One of the biggest problems facing small businesses around the United States is cash flow. There are ways to keep the cash flowing even when you have a number of invoices that are past due. Many American businesses turn to business factoring companies to help. Experts from the International Factoring Association say that there are a number of ways going this route can help a business stay afloat when their cash receivables department stops having incoming payments to process. Here are some ways
- Using invoice factoring services can protect your credit rating. The International Factoring Association experts like to remind business owners that this service is not the same thing as a loan. When you work with an invoice factoring company, they buy the invoices you have outstanding and often pay upwards of 90% of the amount due. The funds that they supply can be accessed quickly. At the end of the day, this is a good way to get the cash you need, as quickly as you need it, and you do not do anything to your credit score or report. The opposite is true when you get a small business loan.
- Unlike loans, using a business invoice factoring service can repair your credit score. When you are not as worried about the cash flow at your business, you can pay off any company debts and raise your credit score in the process. Generally, your credit score reflects how much credit you have available and how much you are using. As you pay off your debts, your score goes up. When you have a steady stream of money coming in you can do the things that improve your credit, you can pay on time (or early) and you can avoid maxing out your credit.
- Using commercial factoring companies can also help your credibility. Experts at the International Factoring Association say that when businesses work with the best invoice factoring companies, you do more for yourself than improve your credit score. When you are able to pay your bills on time, you become more credible. Your worthiness to your vendors and creditors.
- These services can help you with any loss mitigation you need. When you are concerned about how likely it is that certain invoices will be paid, you are well served by working with an invoice factoring service Typically, they have either departments that handle cresit and collections or they work with qualified professionals who do. This can take some of the stress off of you.
- Many invoice factoring companies offer more than just to buy your outstanding invoices. There are a number of other programs that are offered to help businesses who work with companies endorsed by the International Factoring Association. These include, but are not limited to discounts on tires, electronic logging devices (ELD), cards for free fuel, and roadside assistance that is available 24/7.
- They can give you flexibility. Not all invoice factoring services operate the same way. You may have customers or clients that are great, they have been with you a long time, but they do not pay on time. You know you are going to be paid, eventually, but you want to maintain control over their invoices. When you are dealing with freight factoring services, ask if you can hold some invoices back.
Anyone who owns their own business knows just how many hats they have to wear. At some point, the majority of businesses, in the United States and around the world, will have issues getting paid for the work they do. For small businesses, these delays can cause big problems. When vendors are not paid on time, they may drop you. Employees certainly do not want to have to worry about getting paychecks that bounce.
This is where companies endorsed by the International Factoring Association come in. This association works with its members to provide leadership, education, resources, and keep them to a code of ethics. This means these firms are dedicated to providing the best service to their clients. It is also much easier to run a business and stay alive and keep all the bills paid. That is the best way to run any kind of business.