Invoice Factoring the Greatest Way to Grow a Small Business
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 businesses there are several options to generate short-term capital. The first is to secure traditional financing from their bank, and the second is to seek an investor(s). The third option, factoring, comes into play when the first two options are not a viable solution for a small business.
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.
Invoice Factoring Provides Immediate Access to Working Capital
Relieving a business of the burden of waiting N30 – N90 on customer invoices for cash-flow. Our solutions provide a business with the ability to expand new customer orders, cover supply for seasonal business, add additional employees, and expand a production line worry-free. 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 Factor
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.
Growing your small business should be the only challenge; access to short-term capital should not. Invoice Factoring provides the flexibility, scalability, and reliability for many small businesses to quickly generate growth. If your small business is looking to grow, contact us today to see how we can provide a solution to meet your business needs.