The impact of COVID-19 is still strongly felt in many parts of the country and business owners have expressed concerns about their declining cash flow. Many of them have been considering invoice factoring and are reviewing their receivables in the hopes of securing financing to increase their current cash flow.
The U.S. Small Business Administration is no longer accepting applications for Covid relief loans or grants. During this time of continued economic challenges, accounts receivable factoring can accelerate access to cash and help small businesses pay employees and continue to serve customers.
What Is Accounts Receivable Factoring?
AR factoring can help businesses affected by the Covid-19 crisis. Factoring is not a loan but is instead, selling your accounts receivable at a discount. Factoring invoices is done to improve your cash flow and allow you to pay your debts on time. Since you get the money upfront, you no longer need to wait for your clients to pay you. You can use the money you get from the factoring service to pay your suppliers and employees or anything else that needs to be paid.
Factoring agreements are flexible and allow your business to select the invoices to be included. Once the invoices are provided, they will be verified and an agreement can be reached with the factoring company, usually paying an agreed-upon percentage of the invoice value within 1 to 4 business days. The fees associated with a factoring agreement will be based on the creditworthiness of your clients and the size of the invoices.
Having the means to improve your cash flow will help your business grow. Invoice factoring is an excellent solution for businesses in a variety of industries. Instead of waiting 30 to 90 days for payment from your clients, factoring your accounts receivable can provide up-front cash to help your business flourish.
Porter Capital offers financing solutions to support your business growth. We can provide instant funding for your business through invoice factoring and asset-based lending. Our economy is still in recovery mode and many government funding options are no longer available. Our working capital solutions could be a good fit for your business. Contact us to learn more about our offers.