Are you a contractor who is worried about having to let your employees go over the colder months due to slow cash flow? This is a common problem for small and growing contractors. Invoice factoring can help. With construction invoice factoring you get access to the funds you need to make payroll and keep your employees, even during the colder months when business might be slower.
Invoice factoring, also known as accounts receivable factoring, turns your unpaid invoices into immediate working capital, regardless of your credit history or company size, eliminating the need to wait 30, 60 or 90+ days to get paid. One benefit that invoice factoring has over getting a traditional bank loan is factoring companies look at the creditworthiness of your customers, instead of that of your business. Given that, if your business has a creditworthy commercial customer base with unpaid invoices, invoice factoring is an option for you to consider.
If you are used to the lengthy process of trying to get a bank loan the quick and easy process for working with a factoring company might surprise you. With a bank it can take months to get approved for a line of credit. However, with a factoring company account set up takes a matter of days with funds being approved generally in less than 24 hours. Once your account is set up the process is simple to continue to receive funds. First, you simply complete the job and invoice your customer as usual. You will also need to send a copy of the invoice to the factoring company. The factoring company will then send you cash, this is usually up to 80% of the value of the invoice, often in a matter of hours. The factoring company will then wait to collect on the invoice from your customer and send you the balance, less a fee, once they have collected the payment.
Invoice factoring could be the working capital solution your business needs when cash flow is slow allowing you to keep your employees even during slower times.