Running a business is already challenging enough without throwing cash flow problems into the mix. But if you are feeling the economic crunch, you should know that you are not alone. You are not the only one having issues managing your working capital.

If you are in dire straits, you might want to consider invoice factoring. There are numerous benefits of availing of this financing activity. If you want to find out what they are, you should pay close attention to this article.

Streamlining Your Cashflow

Before we proceed with the benefits of invoice factoring, let us define what it is. You are selling your receivables (or invoices) to financing companies. You will immediately get cash during the transaction. Thus, you have the money to buy raw materials, fill orders and expand your business.

Please take note that cash flow problems are responsible for the failure of 82% of small businesses in the country. Being able to exchange your invoices with cash will give you financial freedom. Best of all is that this will not add to your liabilities because you sold your invoices to the financing company.

Promotes Better Credit Control

Another excellent benefit about invoice factoring is that it takes away the burden of credit control from you. Thus, saving you both time and money. You are more confident about accepting terms from your clients because you do not have to wait for them to settle their accounts.

Your factoring company will handle every aspect of credit control for the invoices that you factor in. Other than that, they will be the ones who will check your client’s credit, collect outstanding amounts, and provide you with detailed reports of every transaction. Doing this yourself can be very costly. But these back-office services are included in your fees.

Funding Your Company’s Growth

Availing of invoice factoring does not necessarily mean that you are in an immediate financial crunch. You might want to sell your invoices to expand your company. Considering that experts say that the current financial instability is an excellent time for companies to start or to grow because of the lesser number of competitors, you should take advantage of it. But your lack of capital may hinder you from doing this.

Selling your invoices will provide you with the capital that you need. You will have the funds to explore new marketing ideas and tap new clients.

Easier to Qualify

Invoice factoring is considerably cheaper compared to other financing options. You do not even have to pay any interest. Once you hand in the invoice, you get the cash without any strings attached. Of course, you would be paying a factoring fee, which is significantly lower compared to paying a monthly amortization.

What is even about invoice factoring is that you can negotiate the factoring fee with the lender and is part of the contract. Other than that, you will know in advance what you will pay for each invoice. Thus, you can decide which invoice to include.

Conclusion

For your business to succeed, you need perseverance and determination. On top of that, you would also need a substantial amount of money for your operations and other essential activities. But before you avail of this service, you need to understand what you are getting into.

If you are ready to avail of invoice factoring, you should immediately reach out to Porter Capital. We are your partner in your quest for success. Call us now to get started!