When it comes to funding options for small to medium sized businesses it can seem like the system is stacked against you. However, if you are aware of the options and reasons for factoring accounts receivable, you can choose this funding type to address cash flow issues and fund your business.
For all Tennessee companies with a minimum of $25,000 in account receivables, factoring is an option. You can sell these invoices to a factoring company, obtaining funding for a percentage of the value. The factor then assumes the collection responsibility, deducts their fees, and provides you with the balance when the invoice is paid in full.
There are many reasons for using factoring accounts receivable for a business. With the advantages of this system through top factoring companies it is a reliable, viable, and essential consideration for virtually any type of business.
Payroll and Hiring
For staffing companies, businesses with government contracts, IT companies and even processing and manufacturing companies, the gap between production or services provided and payment of the invoice can create a cash flow problem.
To retain top professionals and employees, being able to make payroll weekly, bi-weekly, or monthly is critical. By using factoring accounts receivable payroll funding is always there, as is the money needed to hire new crews or staff to expand your company and take on new work.
Materials and Supplies
When you do have the chance to grow and expand, using factoring accounts receivable companies allows you to have the cash on hand to buy the materials and supplies needed for the job.
With a simple online application and no need for a personal guarantee or business loan application, you can be approved for funding within 24 hours. Then, within days up to 80% of the value of the invoices sold to the factor will be wired to your account. As this is not a loan, there is no interest and no repayment, and the factoring doesn’t impact your business credit score.
No Loans or Debt
Without the need to calculate the long-term interest costs and the time needed to get a business loan, factoring accounts receivable is a quick, easy, and effective funding option.
By working with a factor without the need for a contract you can choose how long to use factoring accounts receivable for your Tennessee business, and then end the contract when you have a steady cash flow. This gives you the freedom to have the funds you need to run your business without any long-term obligations.
