Every business needs room to grow, and for small businesses, being able to have a steady and quick cash flow can be a big help in making growth happen. While there are many financing options available for businesses, hiring a factoring company can provide benefits that other avenues simply can’t offer. What are the advantages of hiring a factoring company? Continue reading to find out.
Capital Without the Hassle
Unlike a loan, you don’t have to jump through a number of different hoops to qualify for invoice factoring. Whether or not you qualify will not be solely based on the strength of your assets or balance sheet or your personal credit score. This means that virtually any business with growing sales should be able to qualify. Since it’s not a loan, you won’t have to worry about future payments to make and there’s also no accumulation of debt on your balance sheet.
It also won’t take much time get started. Approval usually only takes 48 hours, and the factoring process is fast. It typically only takes 24 hours to be paid, so your cash will be quickly accessible. There are also no requirements when it comes to the use of funds. For a loan, you’ll traditionally be required to spell out what you’ll be doing with the money, but you don’t have to justify your spending with a factoring company. Since you won’t be waiting around for your customers to make payments, you’ll also be able to meet your payroll and other expenses without worry.
Today, most factoring companies don’t have minimum volumes or long-term contracts, so you can make adjustments according to your needs, not what’s demanded by an agreement. This means that you can use invoice factoring as much or as little as you want. Factoring fees have also significantly fallen over the years, so you’ll sometimes find fees to be as low as 1.5%, and advances up to 95% are sometimes available. That means you can receive an influx of cash without worrying about massive fees, and even use advances to cover unexpected expenses.
Most small and local businesses could benefit from working with factoring companies in Kennesaw, GA, but ultimately it comes down to what you think is best for your business and your plans.