What are the benefits of invoice factoring?
Instead of waiting on customer payments, you can factor a customer invoice on the same day it’s generated and receive and advance of up to 98 percent of the face amount of the invoice right away.
Factoring receivables enables you to focus on growing your business rather than chasing invoices or performing collections. You can gain immediate access to working capital by speeding up cash flow, so that you can reinvest in your company much more quickly.
Factoring receivables could also be the key to positioning your business to be able to take advantage of emerging opportunities. Organizations that factor invoices expedite cash flow, which means they have more flexibility to:
- meet operational expenses
- take advantage of supplier or vendor fast pay (or cash) discounts
- extend more generous payment terms to their customers as a competitive advantage
- reinvest working capital in their business more quickly in order to expand
- serve larger accounts or take on new customers.
There are also additional benefits for businesses that choose non-recourse invoice factoring over factoring with full recourse. When you factor invoices with a non-recourse factoring company, you may be able to completely eliminate financial risk from bad debt.
Find out more about factoring invoices with recourse vs. non-recourse factoring companies.