Where do you turn if you are a new business and/or a small business in need of working capital but a bank has turned you down? Since new and small businesses often have a harder time acquiring working capital to cover day-to-day operating expenses and growth opportunities, invoice factoring is often a great option. When a business is turned down by a bank it’s usually for one of two reasons – they’re too new or their credit is too low. In fact banks often require a 2-3 year track record of earnings to qualify for a loan whereas Factoring companies don’t look at either of those criteria. They look at the creditworthiness of your customers. To be eligible for invoice factoring all you need is unpaid accounts receivables and credit worthy commercial clients. Invoice factoring allows your business to sell it’s unpaid invoices to generate cash sooner than if you collected the money on your own, often in less than 24 hours.
As an added benefit some factoring companies will perform credit checks on your customers and provide this information to you for no cost. This will help you to evaluate your customer’s history of paying their bills and their creditworthiness.Back to blog