Factoring finances small business via selling accounts receivables, or invoices to a commercial financial company at a discount, which is known as the “factor.” Small businesses who encounter cash-flow shortages and slow-paying customers may seek factoring companies for extra working capital. The goal of factoring is to receive cash faster than waiting for customer payments.
Factoring sells an asset, or the invoice, which is not a business loan. You do not owe debt for the money received. Factoring allows you to get a quick access of working capital since factoring companies generally pay your invoices within 24 to 48 hours. When the invoice is paid, the factor owns the right to collect it. The factor will pay around 75% of the invoice. Factoring has become more and more popular with small- to mid-sized businesses, such as clothing, staff, and health care industries. Factoring companies require the validation of customers’ payment history, because the invoice will be collected directly from your customers. The more creditworthy your customers are, they quicker access of the working capital you will receive.
Factoring offers a short-term fund, while you can continuously withdraw working capital when in need through line of credit. Integrity Corporate Funding provides a straightforward service while the banks involve lengthy paperwork process. Contact us today for more detailed information, and act quick to finance your business within 24 hours approval.