Large and small businesses can struggle with accessing working capital. Regardless of whether they are trying to keep up with inventory or customer delayed payments, managing cash flow is important to growing and obtaining a business. A business can take advantage of SBA loans, bank loans, invoice factoring, and small business loans as financing options.

What is invoice financing?

Invoice financing provides fast payments on a business’s outstanding invoices. The company receives immediate payment on their unpaid invoices, and the invoice financing company waits for the customer to pay the invoice at the end of the payment term, typically net 30-90.

This type of financing is for businesses that sell products or perform services on credit terms. Companies seeking a factoring line of credit benefit from receiving cash immediately, instead of waiting 30-60-90 days for payment from their customers. Unlike a bank loan, you are not incurring any debt; instead, there is a small factoring fee to selling your invoices and receiving the cash immediately.

When does invoice financing make sense for a business?

When a business needs financing fast

Getting business financing through an invoice financing partner is a lot quicker and smoother than a traditional loan. If you’ve spent some time in business, you know that some things cannot wait. Companies can be approved in as little as 24 hours and start financing their invoices immediately; there is no lengthy application process. Approval is not based on the business’s credit score, but the customers’ credit score.

When a business doesn’t want to put a cap on funding

Invoice financing does not limit how much a business can finance; it all comes down to its volume and needs.

When a business doesn’t want to add any additional debt

A business incurs no new debt with invoice financing. Since there is nothing to pay back, the company avoids any interest rates. The only thing the business pays for is the small factoring fee pulled from the total invoice amount.

Additional types of financing options

Inventory Financing: An asset-backed, revolving line of credit or loan made to a company that serves as a cash injection to purchase more products where the inventory acts as collateral to the lender. Companies with valuable inventory that can be appraised qualify.

Equipment Term Loan: An asset-back loan repaid in regular payments over a set period, usually in 1 to 10 years. Companies or individuals that need a loan against real estate qualify. The Loan to Value will be between 30% and 50% of the appraised value.

Bridge Loan: A short-term loan repaid in a year that is secured by real estate. Companies with equity in equipment that can be appraised qualify.

Porter Capital is your strategic business partner.

If you’re in the finance industry and work with businesses that need alternative financing, think about Porter Capital. We complement your business with an additional revenue source through your referrals.

Think of Porter when your client:

  • Is seeking a credit line for growth
  • Is struggling to secure a credit line from traditional sources
  • Has annual revnues between $100,000 and $100,000,000

  • Sells to businesses and/or on credit terms (Net 30-90)
  • Has an unsecured line from the bank and not enough to capitalize
  • Needs more credit than the bank is comfortable extending

Porter advances roughly 90% of the gross value of the AR listed on the balance sheet. We offer a complete back-office solution that includes cash posting, credit insurance, collection services, and institutional security against cyber threats.

The best way to refer a client is to set up a joint call with your prospect and Porter or fill out our partner form here.

About Porter Capital Corporation

Founded in 1991, Porter Capital has grown to be one of the biggest privately-owned financial companies in the South East, providing billions of dollars in working capital solutions to companies across multiple industries throughout the United States.

For more information, listen to our Accounts Receivable Financing with Porter Capital webinar here.