Benefits of Invoice Factoring For Small Business

Benefits of Invoice Factoring

When it comes to growth, many small businesses struggle.  A lack of growth is often attributed to many causes, but the largest contributor is typically liquidity, not sales.  For small business owners, Invoice Factoring is an effective solution to generate capital to meet short and long-term goals.  

Invoice Factoring, also known as Accounts Receivable Financing, dates back thousands of years to Babylonian times.  While modern-day factoring has evolved one thing remains it allows business owners to unlock capital from unpaid invoices. 

How Invoice Factoring Works

Invoice Factoring is when a business sells their accounts receivable (“A/R”) invoices to a third party (“the factor”) at a discounted rate to provide the business with working capital.  Once the factor collects on the outstanding invoice from the customer, the client receives the remainder of the invoice minus any fees.

Benefits of Invoice Factoring Immediate Access to Working Capital

Immediate Access to Working Capital

Continually waiting N30 – N90 on customer payments in order to sustain cash-flow. Invoice Factoring can advance working capital on the outstanding invoice, so your business is able to cover payroll, expand new customer orders, cover supply for seasonal business, add additional employees, and expand a production line worry-free.  

Invoice Factoring Offers Flexibility

Along with the ability to infuse working capital into a small business swiftly, a factor will extend credit lines quicker than traditional financing, and will scale with you as you grow. Invoice Factoring provides limited financial covenants for small businesses allowing them to qualify for financing when they otherwise would not with a traditional lender.

What to Look For in a Factoring Company


Online applications and streamlined approval processes make setting-up your account simple and easy-to-use.


Quick access to decision makers who are able to approve funding timely.


The solution you choose should relieve the burden of relying on customer invoices for working capital. In addition, you want a factor who will make your business a priority throughout the life of the partnership.


As your business grows choosing a factor affiliated with a national bank provides your business with several financing options to meet all of your working capital needs.

Last Word

Growing your small business should be the only challenge; access to capital should not.  Invoice Factoring provides the flexibility, scalability, and reliability for many small businesses to quickly generate growth.  Experience and stability matter when it comes to executing a successful working capital strategy. Count on Seacoast To Meet Your Clients Financing Needs. 


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