When your business uses factoring services, the advantages go well beyond fast access to capital. Factoring services can help make your business m ore financially secure, allow for rapid growth, and much more. The experts at New Century Financial have put together a list of the biggest advantages of using factoring services to give better insight into how businesses benefit in both the short and long term.
Improved Cash Flow
It’s no big secret that if you have revenue tied up in unpaid customer invoices, cash flow can seem pretty tight. Even if sales are high, waiting 30 days or longer for customers to settle accounts can threaten to flip finances upside down. Factoring converts outstanding receivables to cash in as little as 24 hours, which supercharges your cash flow.
Reducing the Need for Loans
Business owners want to avoid debt and preserve credit ratings whenever possible. By converting receivables to cash through invoice factoring, businesses can build up capital and reduce their reliance on loans.
Zero Debt and Preserved Credit Ratings
Factoring is a simple exchange of receivables for cash. Because of this, no debt is placed on the balance sheet, and business credit ratings are preserved. Financing solutions don’t get any simpler.
Meet Payroll Obligations
A company can get an extension on utilities and other bills, but one of the first rules of business is to always make sure your employees are paid on time. Cash flow strains can make meeting payroll obligations challenging. Because factoring directly improves cash flow, making payroll becomes a non-issue.
Position Your Business for Growth
Factoring promotes growth for businesses of all sizes. When cash flow is improved and the need for debt is reduced, businesses can accumulate the capital they need to position themselves for growth. Business owners can act on time-sensitive opportunities instead of pushing back timelines due to lack of funding.
Putting Control in Your Hands
Other forms of financing make businesses beholden to lenders. Factoring, by contrast, is fully customizable. Businesses can factor as much as they want, when they want. Additionally, businesses can show which invoices or even which part of invoices to factor. No hidden fees. No extra charges.
New Century Financial provides comprehensive factoring solutions tailored to your needs. To get started, contact our offices today.