When short of funds, you would obviously look for funding solutions. You can take loans. You can also ask your clients to pay up early. If you have extended credit terms to them then you can consider this solution. However, both these solutions have limitations. If you apply for loans, you would be made to wait. Furthermore, you would be questioned on various aspects including your credit history. In fact, your past bankruptcies may also reduce your chances of getting loans. On the other hand, if you ask your customers to help you by giving your funds back before the due date, they may not like the idea.
Interestingly, invoice factoring is free from these limitations. Firstly, you do not have to wait. The approval comes within 24 hours. Even if some more time is taken by the factoring company, you don’t have to wait for weeks, as is the case with banks. Furthermore, the funds are with you to use at the earliest. So, your expenses get taken care of before things get out of hands. Secondly, you simply sell your invoices. The customers were anyways supposed to buy. When you get the invoices factored, they start paying the factoring company instead of you. However, they are not made to pay before time.
In the meantime, you must understand that apart from overcoming the limitations of bank loans and pre-payments, there are many other things that make invoice factoring one of the most coveted funding solutions. A high advance rate is one of the things that make factoring a popular option. There are factoring companies that are willing to go an extra mile and offer an advance of up to 85%. Furthermore, factoring has its own perks. When you sell your invoices, you establish ties with a company that may offer you a lot more. For instance, the company may decide to give you online access to your account.
Interestingly, invoice factoring is free from these limitations. Firstly, you do not have to wait. The approval comes within 24 hours. Even if some more time is taken by the factoring company, you don’t have to wait for weeks, as is the case with banks. Furthermore, the funds are with you to use at the earliest. So, your expenses get taken care of before things get out of hands. Secondly, you simply sell your invoices. The customers were anyways supposed to buy. When you get the invoices factored, they start paying the factoring company instead of you. However, they are not made to pay before time.
In the meantime, you must understand that apart from overcoming the limitations of bank loans and pre-payments, there are many other things that make invoice factoring one of the most coveted funding solutions. A high advance rate is one of the things that make factoring a popular option. There are factoring companies that are willing to go an extra mile and offer an advance of up to 85%. Furthermore, factoring has its own perks. When you sell your invoices, you establish ties with a company that may offer you a lot more. For instance, the company may decide to give you online access to your account.
