Even the SBA Understands the Need for Invoice Factoring
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Is Factoring Invoices a Good Choice for Entrepreneurs?
The 31 million Entrepreneurs in the USA need help to avoid becoming part of the 82% of businesses that fail due to poor financial management. What if we told you there is a fast funding source that requires no monthly repayment or strict underwriting standards? The answer is invoice factoring. And factoring is being perceived differently by entrepreneurs, banks, and the SBA in 2023. You can even use A/R factoring to buy a business.
Factoring is a valuable tool for small businesses. It helps companies to gain access to the cash they need to grow while helping them avoid the risks of borrowing money from traditional banks. Factoring’s perception is trending up, especially versus high-cost, low-service MCA loans.
Factoring has been around for hundreds of years, but it’s only recently that entrepreneurs have started to understand its benefits. Factoring can be a great alternative to traditional loans and a powerful tool for generating cash flow.
Entrepreneurs with unpaid invoices can receive 80 to 93% cash advances of their receivable value. We provide funding the same day your account is approved. Complete an encrypted application to begin funding.
Factoring companies provide their clients with financing options, including accounts receivable purchase agreements and purchase order funding. When you factor your invoices, you sell them to Bankers Factoring at a discounted rate. In exchange for immediate payment rather than waiting 30 days or longer for payment from your customer.
We have special factoring programs for women-owned businesses.
The Evolution of Factoring in Small Business
As more small businesses have been forced to offer extended payment terms, factoring has become a mainstream financing tool. Funding business through unpaid invoices has been around since Babylonian times. Trade partners have sold invoices for thousands of years to fund business operations.
Since the 2008 financial collapse, more companies have increased their payment terms from 30 days to 45 and 60 days. Selling your unpaid invoices started with textile companies and is now involved in staffing, oil and gas, wholesale, and importing.
Small business factoring has changed in recent times. Entrepreneurs sell unpaid accounts receivable (A/R) for startup funding. Financing your startup can be tricky, but factoring is good for customer relations.
As small businesses grow, entrepreneurs must show they are serious about their cash flow and finances. Accordingly, working with Bankers Factoring is an easy way to accomplish this.
Related article: How Factoring Financing Impacts Customer Relations
What is Factoring in Entrepreneurship?
Factoring is a financing solution that small businesses use to free up cash flow. It allows you to sell your receivables, or your customers’ accounts receivable, to a third party for cash.
The factoring funds are then disbursed to your company daily. Furthermore, allowing you to pay your bills and keep the business running smoothly without waiting for customer payments. The money from the factoring transaction comes from Bankers Factoring, not borrowed from banks or other lenders.
Factoring is a great way to fund a new business, particularly those that rely heavily on credit sales. Factoring funding is helpful during economic downturns when cash flow is tight and customers cannot pay their bills on time. Furthermore, by selling your invoices, you do not have to worry about monthly repayments or variable interest rates.
Related article: Non-recourse Invoice Factoring for Startups
Entrepreneurs Love Factoring Funding.
Factoring Funding is a great way to get cash quickly.
Small business financing through selling invoices can help you manage cash flow by giving you the money before your customers pay. Accordingly, the instant availability of cash helps entrepreneurs pay bills timely.
Even the small business administration (SBA) understands that entrepreneurs need working capital from factoring, and I have made it easier to subordinate SBA loans to factoring companies. Big government and companies take 30-90 days to pay their invoices, and SBA loan products are not the best tools to monetize your accounts receivable. Also, factoring fees and rates are much lower than 20 years ago and donโt have the SBAโs rigid 650 credit score minimum.
Factoring Funding is also useful if regular payments come in from customers who tend not to pay on time. Funding allows companies to access capital without waiting longer than necessary for those funds.
Advances in technology in startup funding have made the funding process 100% digital for modern entrepreneurs.
As a business owner, it is important to have free cash flow and strong processes to collect payments. Bankers Factoring provides a total A/R management solution with low factor rates.
Factoring companies are rated by credible agencies. Here is Bankers Factoring best of factoring companies rating for 2022 and 2023.
Small Business Customers Benefit from Factoring Services
Factoring is a great alternative to traditional loans and can help your business stay solvent during unstable times in your industry.
- It enhances liquidity: When you factor your invoices, you receive cash immediately instead of waiting weeks or months for customer payments. This allows you to pay employees and retain critical staff.
- It enhances cash flow: Factoring improves cash flow by providing immediate access to working capital. Examples of expenses include payroll, rent payments, and other critical outlays like taxes or utility bills.
- Receive bad debt protection: non-recourse factoring with Bankers Factoring provides exclusive bad debt protection for your sold invoices. If your customers go out of business or cannot pay their bills, we take on the credit risk.
Related article: The Pros and Cons of Invoice Factoring
Technological Advancements Make Selling Invoices Easier
Factoring services are available online, via mobile apps, social media, and even text messaging. You can receive a quote within 24 hours and get paid faster with factoring. Entrepreneurs use factoring funding to increase their efficiency. Accordingly, technology makes it easy to run your business on the go.
- Online: The most common way to apply for funding is through the website of Bankers Factoring. You complete an application form with your driverโs license, 3 months of bank statements, and an A/R aging summary.
- Mobile Applications: Now, entrepreneurs with smartphones or tablets can apply for factoring services. Apps enable users without experience dealing with funding companies to access everything they need within moments.
- 24/7 Reporting Portal: Bankers Factoring clients receive access to a 24/7 online site to view all A/R data.
Factoring Enhances Liquidity During Economic Downturns
Factoring is a financial tool that helps entrepreneurs to manage cash flow and stay afloat during periods of low revenue. It provides your funding options when you have outstanding invoices.
Factoring services are available to all businesses, regardless of size, with invoices to factor. Instead of waiting for the customer to pay in 90 days, our factoring work provides advance rates of up to 93%.
Related article: Ready Your Business for a Recession: 13-week Cash Flow Forecasting
Banker Factoring Entrepreneur Funding Services
Entrepreneurs need funding to make their dreams come true. Small business funding through Bankers Factoring provides reliable cash flow for your business that extends credit terms. Our non-recourse factoring program protects your cash flow with bad debt protection. Our goal is to help you grow your business when other lenders or banks would not.