Selling Accounts Receivable is Simple
Waiting to get paid is an enormous frustration for any business owner. Strong sales mixed with delayed collections can make it tough for your business to expand. Rather than plunge into debt with a restrictive conventional loan, selling accounts receivable through factoring can replenish your working capital fast. Factoring is a fast, easy process that companies use to get working capital by selling their accounts receivable at a discount instead of adding new debt through traditional lending options.
Why Would a Business Sell Their Receivables?
If your business offers payment terms to customers and falls short on cash flow from time to time, then selling a/r may make sense. It’s not a loan; it’s an advance on the funds that are already yours. You’re just getting paid right away rather than waiting months for your customers to pay. Use it as a short-or-long-term financing option.
When you sell receivables to a factoring company you will receive:
Funding within 24 hours of verification
Receive money directly in your account via a same-day or next-day bank transfer.
High advances – up to 95 percent of your invoice value!
More of your money when you need it. The remaining funds are held in reserve until the invoice is paid.
Fast funding of new customers
Your factor makes selling accounts receivable simple even when you work with new clients. Complimentary credit and background checks will help you work with only the most reliable customers.
Total control over your cash flow
Use the cash wherever your business needs it most, whether that means covering everyday expenses, making payroll, or investing in new resources. Sell accounts receivable when you could use the additional cash flow.
Sell Your Receivables, Grow Your Business
More working capital is just one way that selling accounts receivable can transform your business. Below are just some of the ways you can reap the full benefits of an invoice factoring relationship!
Free back office support
As mentioned above, your factor will run background and credit checks on your new and existing customers to approve them for funding. This will verify their ability to pay, influence their credit limit, and reassure you that you are working with reputable companies. Another free service invoice factoring companies offer is collection assistance – while you focus on other areas of your business, the factor will follow up with your customers to receive and process payment.
Simply having cash on hand to pay your expenses on time will help you maintain your credit rating. However, when you don’t have to wait for payments you can avoid late fees and other extra charges – and you can use the money you save to pay down older debt!
Selling AR can benefit your company in unexpected ways. For example, you may be able to negotiate payment incentives with your creditors, confident that you’ll have the cash to pay invoices early. In addition, the back office support higher on this list will help you eliminate unnecessary overhead and streamline your company’s operations!
Not only can you choose which accounts to factor and when you want to submit invoices, you can also control the length of your factoring relationship! Our funding partners don’t require long-term contracts (most agreements are for six- or twelve-month periods) so you can regularly evaluate whether you are still getting everything you need out of your factoring relationship.
Any Small Business Can Benefit from Selling Receivables
Factor Finders has expert account managers ready to handle the intricacies and unique needs of nearly every industry. As long as you are selling to commercial clients and your invoices are assignable (that is, unpledged to another party), they are eligible for factoring! Some of the industries we serve include:
Here’s What Documents You’ll Need to Start Factoring:
Articles of Incorporation
Current customer list and aging report
Any invoices you wish to factor