Factoring Articles

How Accounts Receivable Factoring Enables Small Business Flexibility

In today’s economy, a company’s ability to change rapidly according to what the market needs is essential.  An effective small business strategy known as accounts receivable factoring is one that’s based on dynamic changes which often need to be made without hesitation. In the end, it is the business that can change the most quickly that has the best chance of becoming the survival of the fittest in the business world.

For example, one industry where this is especially true is software development and Internet companies where small businesses can grow overnight. Updates or changes that quickly respond to market needs are often required overnight -- but creating these updates requires funds that the company may or may not have on hand. What if, for instance, additional staff members are required to work overtime, or what if they need additional office equipment, or server space? It is all about being able to fund these sudden expenses which could help the company shoot to the next level, or fail.

Most small businesses do not have extra cash on hand to be able to move with the market. One option for obtaining additional funds quickly is factoring – an easy, reliable way to increase a business’s cash on hand. But many small business owners haven’t heard of factoring. What is it?

Invoice factoring enables a small business to sell its accounts receivable invoices to a third party at a discount. This is in exchange for immediate cash with which the small business is able to fund continued business. Factoring can be used by businesses to cover short-term cash needs during times in which these needs exceed their cash flow.

If you are in business, then you already know the drill -- waiting for customers to pay an open invoice can often take weeks or even months – worse case – up to 90 days. Today, most small businesses simply can’t wait this long. Factoring is an easy and convenient work around for the problem of working in a 21^st century marketplace with the billing tools of a previous generation. While factoring is an ancient and established practice, its applications are very modern, addressing a need for which the traditional billing and invoicing system was never designed. Likewise, business loans or other traditional lines of credit require days or weeks of waiting for approval and transfer of funds. Selling open invoices to factoring services provides instant funds with which to maneuver in the ever changing digital landscape.

Being flexible and able to make quick decisions and maneuvers for your business can literally be the difference between success and failure. Let The Interface Finance Group (IFG) help take your business to the next level. Call 1-877-210-9748. 

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