Many businesses day are commonly using factoring to raise fund. It is a type of financing which help to improve the cash flow of the companies that have slowing invoices. The clients will sell its account receivables to the factoring company. The cleit will then receive money that they will use to pay for the debts.
The first process is finding a factoring company that is going to meet your financial needs. For fast approval of your funding, click here to learn more about this factoring firm. Create an account with the company; the process will take approximately three days. Send the invoices that you want to use to obtain the funds to the factor. The factoring company will give you the advance which is usually 80% of the value of the invoices. Custmesr are going to send money directly to the lender. You will receive a rebate once all the money is collected. The company will deduct the service fee from the amount that had been reserved.
There are many benefits f getting financing through invoice factoring. First, the proves of approval of the funding takes few days. The application of the traditional business loan takes weeks or evens months because lenders must carefully examine your business. Getting the factoring invoice funding is very quick as the approval takes about seven days; on approval, you will receive the funds in your account with 24 hours.
Invoice factoring is not a loan. You do not add more debts inn your business. The factor will be collecting the payment directly from the clients. It is however vital to make sure that you select only the creditworthy customers. You will pay the factor is some debtors fail to pay.
The money that is received from a bank has a restricted usage. The money that you receive from the bank is required to be specified to finance a specific operation of the business; you cannot use the funds for any other purpose. The main benefit of the invoice factoring that for the money that you receive, you can use them the way that you need. The factor cannot dictate how you are going to spend the advances fund.
It is very easy to qualify for the invoice factoring. Your credit history and collateral are not the main factor when you are applying for the loan. The the creditworthiness of the customer is the main thing that the factor is going to consider. If your business has a poor credit score; then invoice factoring can be an excellent choice for you.
It is affordable to apply for the invoice factoring. The service fee is meager. The service fee of invoice factoring ranges between 1 and 4 percent of the billing. Invoice factoring ensure that you have enough cash to run the business.