If you have guaranteed sales in the pipeline but need cash now, consider an Invoice Factoring loan in order to get the funding you need for short term expenses.
Accounts receivable factoring, invoice finance factoring, or factoring agreements (alternate terms) refers to the process in which a business sells its unpaid invoices to a factoring company at a discount. Small business invoice factoring is an attractive option because it allows businesses to access the cash from their invoices quickly, rather than waiting the 30, 60, or 90 days it often takes for an invoice to be paid.
Getting fast cash from invoices allows businesses to cover standard operational and overhead costs such as payroll and equipment, as well as opening up opportunities to expand and invest which may not have been possible with so much capital tied up in unpaid invoices. Invoice factoring loans often have a quicker and easier approval process than traditional business loans because the invoices serve as collateral, and the loan is based on the credit of the invoiced business, not you. However, please take into regard that you will likely be personally responsible for paying the factoring company in the event that your invoice goes unpaid.
Applying for invoice factoring services generally involves less paperwork than a business loan application, with the invoice itself being the most important part. Some of the best invoice factoring companies may still want to see your bank statements and credit score.
Even though approval and funding can be fast, the best time to get small business funding is before your business needs it. That way, you’ll be able to do your research, make a funding decision confidently, and get the best invoice factoring rates available.
StreetShares provides the best options for getting the cash you need when you need it most through our collateral-free lending options.
Learn more about other simple collateral-backed funding solutions that enable small and medium-size companies to secure funding quickly and easily.
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