The need for is an inevitable business constant that is universal. The continued growth or operation of your business might be dependent on your success in accessing sources of financing more than anything else you can imagine. It is in those times of financing need that your business wits get a one-on-one with some acid tests.
Your ultimate test as a businessman is how knowledgeable you are about the financing options that exist on the market and how well you can match them to your needs. In the course of running your business, you will meet up with a lot of financing needs ranging from employees’ wages & salaries, working capital, paying suppliers, financing new projects, and a whole lot more.
One ideal way of seeking funding for a number of needs is to take advantage of your invoices. If your business involves extending credit to your clients, then you can effectively take advantage of this by borrowing against the invoices. This phenomenon is called invoice factoring or receivables funding. In this relationship, the finance company providing you with the factoring services is called the factor.
The first thing you have to do is to find a good provider of invoice factoring services. There are numerous advantages in using an invoice factoring company as a business funding source but you must exercise due caution in the selection of a right one. This is due to the existence of different collection policies that are utilized by these companies. Ads you sell off your invoices to the factor, he assumes full responsibility for following up on them and ensuring that your customers make good on their obligations. This aspect that puts the factor in direct contact with your customer needs to be well managed. A factor with unethical or aggressive collection tendencies will not only drive all your clients away but ruin your reputation.
If you have found the right factor, the rest is a simple walk in the park especially if your clients have a history of making timeous payments.
Invoice factoring is;
- A one-time event with no further obligations
- Not a loan
You can also apply through what is known as paperless factoring which is strictly online and very fast. Either way, you will get up to 85% of the total value of your invoices within a day or two. You can search online for a reputable fast and small business loans affiliate.