If your business needs a financial boost, there is a way to get one without having to deal with the lengthy procedure and difficulty often associated with getting business loans from the bank. That way is through invoice factoring, which has helped numerous companies and businesses to get out of financial strains more easily. True to its name, invoice factoring is one way you can release your funds from any unpaid invoices by allowing the factoring company of your choice to take over the collection of payments on your behalf. Through invoice factoring, you can release up to 90% of the value of your unpaid invoices without having to worry about spending your precious time chasing slow-paying customers or late payments. The amount of funds you release from invoice factoring can also be received quickly once it is verified, often as fast as 24 hours after the verification is complete, making it an appealing option for those in need of quick access to capital.
STEPS OF INVOICE FACTORING
Invoice factoring is actually a relatively simple and fast process, especially compared to other alternatives such as taking a business loan from a bank. All you have to do is to raise your invoice to the factoring company of your choice and wait until they process and verify your invoice. The company will then give you in advance a specified amount they buy your invoice for, minus certain fees such as factoring fees or administration fees. The rate varies depending on several factors, such as the age of the invoice and the creditworthiness of your customer, but in general invoice factoring companies can give you up to 90% of your invoice value in advance. They will then collect the payment of the invoice on your behalf, usually within 30 to 90 days, and advances the remaining balance to you after the it is paid.