Invoice Factoring

Invoice factoring is a financing option that can help small businesses maintain cash flow by providing upfront funding for unpaid invoices. Here are some key features and who it is for:

• Receivables management: Invoice factoring allows businesses to sell their unpaid invoices to a factoring company in exchange for immediate funding, typically up to 85% of the invoice value. Once the customer pays the invoice, the factoring company pays the remaining balance to the business owner, minus a fee.
• Improve cashflow: This financing option can help businesses improve cash flow and maintain operations, especially if they have slow-paying clients or need to meet expenses such as payroll, equipment purchases, or hiring new staff.
• Working capital: Invoice factoring is a good option for businesses that need immediate working capital but don't want to take on the periodic fixed payments of a term loan or don't have collateral to secure a traditional loan.
• Amount: Loan amounts for invoice factoring typically range from $10,000 to $2 million, and there are usually no upfront costs or fees associated with the process.
• Most suited for: Invoice factoring can be particularly useful for small businesses in industries such as transportation, manufacturing, staffing, and wholesale distribution, where clients often have long payment terms.