Advantages of Invoice Factoring over Bank Loans
Businesses often need additional funding but are unable to meet the stringent borrowing requirements to qualify for a new bank loan. In this case, they are often referred to a factoring company like Factor Finders. In fact, Factor Finders often gets customer referrals from local banks that want their customers to receive the financial help that they can’t provide.
Quick Application & Approval Process
It’s no secret that banks are strict when it comes to loan approval. Not only can they take a long time, but loan decisions are based on a combination of the company’s previous years’ operating history and the business owner’s credit score. The bank loan approval process can take weeks, or even months. Whereas factoring applications can be approved in as quickly as 3-5 days.
Funding When You Need It
Invoice factoring ensures you receive the funding you need within 24 hours. Factors buy your eligible unpaid invoices at a discount and advance you up to 90% of the total amount within hours of verification. When your customer pays the invoice, the factor will release the remaining balance to you, minus a small factoring fee.
Debt-Free Form of Financing
Traditional bank loans will give you a certain amount of money, which you’re expected to pay back over a set amount of time, in addition to a generally high amount of interest. In order to obtain more funding, you’ll have to add more debt to your balance sheet.
With factoring, you don’t incur any more debt – you’re selling a valuable asset in the form of your unpaid invoices. On top of that, you get to choose which invoices your factor and how often. You aren’t locked into a long-term contract and terms are flexible.
Factoring offers financial solutions that can yield unlimited growth for agencies. Including:
- Credit Protection
- No Debt Added to
- Balance Sheet
- Collections Services
- Credit Analysis
- Same Day Funding
- Unlimited Funding Potential
Factoring Could Be The Solution Your Business Needs
If you’ve been declined for a bank loan, you’re not alone. It’s not uncommon for banks to deny small business owners funding, especially if it’s newly established. Factoring companies base their approval on the credit of your customers since your customers are the ones responsible for paying the invoice.
Invoice factoring is a great alternative financing solution for bad credit, no credit, or companies that don’t want to add more debt to their finances. In fact, factoring can provide the financial stability your business needs to improve your credit score.
Factor Finders works with the best factoring companies across the United States. We will match your business with a factor that specializes in your industry to meet any specific goals or needs of your business.
