How and When to Use Invoice Financing

By: Marco Terry
Submitted: 2007-01-17 15:37:54
Print this article | Tell a friend | For publisher | Social Bookmarking
Rating:
 

Do you have clients that take 30, 60 or even 90 days to pay their invoices? If you do, you are familiar with the strain that slow payments place on your company. Unless you have a reliable cushion of funds in the bank, paying suppliers and employees on time will be tough. And growing your business may be out of the question, at least temporarily, because growth requires cash.

Companies that have this predicament have a couple of options. They can get a bank loan or a line of credit. But those are tough to qualify for and very hard to obtain. A better alternative is to use invoice financing, better known as invoice factoring. As a tool, factoring invoices enables you to get paid in 2 days, rather than in 30, enabling you to operate and grow your business.

Factoring financing has many advantages over other products. First, factoring is relatively easy to obtain. Second, factoring financing lines are directly tied to your sales and have no arbitrary limits. That means that the more you sell, the more financing you can obtain.

When is it appropriate to use receivables factoring?

If any of the following two statements are true, then accounts receivable factoring should benefit your company.

1. You cannot afford to wait 30 to 60 days to get paid by customers.

If your company's biggest problem is that you need your money sooner than the usual 30 to 60 days it takes for your clients to pay, then factoring is the ideal product for you. A factoring company can eliminate the wait and make your cash flow predictable.

2. You need money to pay suppliers or employees.

Companies that need money to pay for ongoing expenses, such as employees or suppliers, can really benefit from invoice financing. Invoice financing will streamline cash flow and help you meet ongoing obligations. However, companies that need the funds to purchase equipment or to buy real estate will usually not benefit much from factoring. There are other products in the market that will be better.

Invoice financing is a great tool that can help make payments predictable. This allows you to plan for growth and enables you to capitalize on new and exciting growth opportunities.

About Commercial Capital LLC

Looking for a factoring company? We can provide you with competitive factoring and invoice factoring quotes. Please call (866) 730 1922 for more information.

Article source: Expert Articles

Most Recent Articles in Small Business category

  • Methods for Small Business Accounting - By: Alvis Brazma
    Small business accounting transactions are a little different from the accounting transactions of large businesses. Accrual and the cash basis are the two methods that can be utilized for small businesses to maintain its accounting books.
  • Get As Much As Possible Out Of Wholesale Closeouts & Liquidations - By: Joel McLaughlin
    If you are tired of your current job and want to strike out on your own, a wholesale closeout business may be the perfect beginning for your new career as an entrepreneur. Learn about this exciting business opportunity that could very well be just what you've been looking for.
  • Dormanex - The Most Effective Sleep Aid - By: Paul Wyre
    Hypnos, the Greek God of sleep, would be really pissed to know that mankind finally found something to get a good night sleep, that too so fast. Well we can't blame him either, he didn't count on Mr. Dormanex being born and do a much better job than he does.
  • Online Merchants - how to protect your company and yourself from credit card fraud - By: frank lee
    Protect your online company and investment from fraudulent credit card purchase
  • Wholesale Closeouts Are Helping Many Lower Costs - By: Joel McLaughlin
    Companies dealing in liquidations and products from wholesale closeouts are the ones that will help lower business costs in these treacherous times.
  • Small Business Accounting Firm - Your Ladder to Success - By: Alvis Brazma
    Small business accounting firm has been proved as a great help to business firms in handling and updating accounting and financial data.
  • Cocoa Farmers Go Straight to Chocolate Manufacturers - By: Cristian Stan
    The chocolate industry is ever improving and developing. If before, middlemen are involved whenever a big chocolate company has to order tons of raw cocoa beans from farmers, now things are different.
  • The Importance of Using MLA Format - By: Orson Dixon
    MLA style is most predominantly used in the humanities, especially in writings on literature and language. MLA format is generally more economical and simpler than other styles.
  • MLA Style - By: Garret Lloyd
    MLA is an acronym for the Modern Language Association of America.MLA format is most frequently used to write papers and cite sources within the subject of liberal arts and humanities.
  • How Cocoa Beans Are Processed - By: Cristian Stan
    How much do you love a cup of hot chocolate in the morning? Maybe you're a lover of chocolate bars and chips? If so, you might as well know how those sweet pleasures of life came to be. Chocolates come from cocoa beans. But to make them rich and tasty, not just any other cocoa beans are used. Only especially handpicked, top quality beans can create chocolates and chocolate drinks that can delight your meticulous taste buds.