Grow Your Business With Invoice Factoring

 Invoice Factoring With business, time is of the essence and money always matters. Some businesses choose to use invoice factoring to help grow their business. What is invoice factoring? It’s a financing option available to businesses that send invoices to other businesses or government agencies. Invoice factoring involves selling and assigning invoices to a factor in order to provide short term working capital. Typically, the factor advances the company 80% of the invoice’s value. After the invoice is paid, the factor pays the remaining 20%, minus fees.

Businesses tend to utilize invoice factoring when there’s a mismatch between the timing of income and expenses and/or they want to grow and need access to cash quickly. As an example, pretend you own a printing company. You have to buy ink, paper and more. You do work for clients but they don’t end up paying their invoice until long after the products are delivered. It might take months to be paid in full, right? Rather than wait so long to get paid, a business like this would benefit from invoice factoring. Meanwhile, what if that printing company gets a burst of business in a short amount of time and needs extra money to buy more ink, paper, etc. to fulfill all their orders? Again, invoice factoring helps make that possible.

Invoice factoring involves “selling” an invoice to a factoring company for 80-90% of capital up front. Therefore, the business gets most of the money quicker, which helps grow the business. The concept of invoice factoring has been around for centuries. Today, it’s often conducted online where business owners take their unpaid invoices and turn them into working capital. Companies like Millennium Funding facilitate this process.

Invoice factoring helps grow businesses because it helps them manage their day-to-day finances better. If there’s a cash flow dip, invoice factoring remedies that. Meanwhile, factoring enables companies to take advantage of opportunities when they come about– rather than missing out on them. Finally, factoring allows a company to focus on long-term goals since their short-term needs are thankfully met.

For more information about invoice factoring options, please call Millennium Funding today at 888-652-8298.