Small businesses, which are defined as organizations with fewer than 500 employees, account for 99.7% of all business in the United States. In order for a small business to succeed, however, though they need a team of hardworking professionals, a quality product or service, and a strong brand, they need to ensure they have enough financial backing to get off the ground.
According to the Wells Fargo Small Business Index, $10,000 is the average amount of startup capital required by a small business owner. Unfortunately, nearly 60% of all outstanding invoices are paid late because other companies are likely struggling with finances.
That’s where invoice factoring services come into play. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for a small business.
Here are some commonly asked questions pertaining to invoice factoring services:
- What can my business use the money for? — Once you start acquiring cash flow thanks to invoice factoring, you can use the money on all kinds of essential organizational aspects. You can hire more staff, open new locations, offer vendor discounts, pay your bills, purchase more inventory, and do so much more.
- Is invoice factoring considered a loan? — No. Invoice factoring is not a loan and will not show up on your company balance sheet. Similarly, it won’t show up on credit reporting agencies.
- Do I need good credit to receive factoring services? — No. Approval can be based on the strength of your actual clients who have invoice payments due. This means no matter your actual personal or company credit, you can still receive factoring services.
- How long does the approval process take? — As long as you have all the required documents, invoice factoring companies should be able to set up your account in just a few business days.
If you want to learn more about receiving the money that your organization deserves and work with trusted invoice factoring services in the United States, give Eagle Business Credit a call today.