Smooth cash flow is an essential factor that keeps your businesses running. As the business grows, it becomes very difficult to meet maintenance and operating costs especially when your customers delay payments. The answer to your cash flow woes is a factoring accounts receivable program that will instantly boost your cash within twenty four hours. Such a program can save you from cash crunch by using the working capital that your customers owe you. Factoring companies are able to offer instant and quick fix solutions to your problems through number of products and services.
Factoring is the process of selling credit accounts receivable for immediate cash. It is a program that has existed for many years and was generally offered by banks. Today, many private freight factoring companies are offering factoring services to a variety of businesses to help them stay in the competition. Most small business owners wanting to stay in the competition are often left with no choice but to offer flexible selling terms to their customers. This puts immense strain on their cash flow, creating a need for factoring. By factoring invoices, you will be able to have cash for the sale thus giving you the confidence to offer flexible payment terms to your customers.
Advantages of Factoring
There are many advantages of using factoring programs and services, especially for those companies who do not want to lose to competition at the early stages of their new ventures. Some of the advantages are, you will be able to easily and quickly receive up to ninety five percent of amount your clients owe you on open invoices, invoice factoring will be processed within or less than twenty four hours, it improves your cash flow, eliminates bad debts, allows for immediate payment of invoices and there are no debts incurred compared to traditional bank loans.
Factoring Companies Vs Banks
When it comes to account receivables financing solutions, factoring companies are always a better choice compared to public and private banks. Factoring companies with years of experience are able to offer flexible solutions. Unlike banks they will not charge you for initial setup or long term contracts. They offer very low fee structure compared to traditional banks. They are also able to process the funds the same day of application. In addition, freight factoring companies also provide instant credit information to new customers at no additional costs. They charge a onetime flat fee for customers with longer payment terms.
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