How Invoice Factoring Can Solve Small Business Problems

Newer and smaller sized businesses can prosper when they act quickly on opportunities to grow as well as better serve their customers. However this can be difficult at times, especially if an opportunity arises and cash flow just isn’t steadily coming in to seize it.

If you’re a small business owner, you might have found yourself in this situation before. You can see that cash is coming into your business because you have the invoices that prove it, however you won’t see that money as soon as you might need to make a purchase that could help grow your business. Big companies and corporations typically have credit or cash on hand to make improvements to their company while continuing to make profit, but what about smaller or newer businesses?

Many small businesses turn to invoice factoring to help keep their business running and growing even if there’s a gap in their cash flow. These gaps can limit a business’s potential for growth, even if their long term cash is positive. This type of financing can help small business owners manage their cash flow better. Here are just a few ways invoice factoring can help your business.

 

  1. Giving a Business “Breathing Room”

This financing option allows a business to sell their unpaid invoices. It gives a business a cash advance, typically anywhere from 80-90% of the value of the invoice sold. The advance gives the company selling their invoices some breathing room in their budget for operating whenever there’s an imbalance in cash flow.

  1. Providing Quick Access to Needed Capital

Sometimes opportunities to grow or expand your business arise unexpectedly, and if cash flow is slow, you might miss out on these opportunities. Invoice factoring allows you to access working capital quickly, in a day or two, or sometimes even within the same day.

  1. Offers Your Employees More Security

If a company can’t manage their cash flow properly, missing payroll is very possible.  Not paying your employees can cause them to leave your company, or if they stay their moral will be diminished. Factoring your invoices to better manage cash flow means more secure employees and lower turnover.

 

With invoice factoring, your business is ready to seize opportunities for growth, pay your employees, and pay expenses that come along with running a business. This type of financing can be a great advantage for today’s small businesses.

  • September 26, 2017
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