Invoice Factoring
Invoice Factoring enables you to convert outstanding customer invoices into instant cash advancements, providing you with immediate financial support.
What is Invoice Factoring?
Invoice factoring, also referred to as accounts receivable factoring, represents a type of small business financing wherein a business sells its invoices to a factoring company in exchange for immediate funding. Upon receipt of the invoice payment from the customer, the remaining balance is transferred to the business owner, deducting a fee.
Invoice factoring provides the working capital necessary to sustain operations and strategize for the future, all without the commitment of regular fixed payments tied to a term loan. In situations where delayed payments from clients hinder bill payments, meeting payroll, investing in technology, acquiring equipment, or expanding staffing, invoice factoring becomes a valuable tool. By converting outstanding accounts receivable into liquid assets, it effectively enhances cash flow to fulfill immediate business requirements.
Fast Financing For Your Business
Upon submitting your invoices for invoice financing, the lender disburses the invoice amount to you, deducting a percentage as payment. The agreement with the lender is fulfilled once your client settles the payment. While having the lender manage unpaid invoices on your behalf can be advantageous, it’s important to note that this approach may result in less control over the collections process, potentially making your clients aware of your cash flow challenges.
Invoices
Entrepreneurs in small businesses opt to sell their outstanding invoices to a factoring service, known as the factor, at a reduced rate. The factor then provides an upfront lump sum, typically up to 95% of the invoice’s total value.
Collections
Subsequently, the factoring service takes on the responsibility of directly collecting all payments from the clients of the small business.
Imbursement
Following the collection process, the factoring service forwards the remaining balance to the business, deducting any agreed-upon fees, usually a predetermined percentage.
Loan Amount From $10,000 - $400,000
Invoice Factoring Details
Qualifying Criteria:
- 550+ credit score
- 6+ months in business
- $10,000+ average monthly bank deposits
Required Items:
- Signed one page funding application
- 3-5 most recent business bank statements
- Invoices you wish to redeem
No Application Fees
Advantages
- Invoice factoring offers a secure and prompt avenue for cash flow by unlocking working capital entangled in outstanding invoices.
- Enlisting a lender to handle invoice collection can save valuable time otherwise spent on administrative tasks and pursuing overdue payments.
- Factoring offers adaptability, allowing amounts to adjust based on the fluctuations in your sales volume.
Disadvantages
- Invoice factoring firms conduct thorough verification of your invoices with clients to ensure accuracy. Involving a third party can impact customer relationships and necessitates relinquishing some control in the process.
- Approval may be influenced if your client possesses a less-than-ideal payment history or credit score.
Why Choose Us?
Different from conventional banks and other alternative lenders, BHS Business Funding places genuine importance on your business. Your prosperity holds the utmost significance for us, and we are committed to avoiding excessive financial commitments that your business might find challenging. Our uncomplicated application process, coupled with swift approvals, facilitates the seamless acquisition of the working capital essential for your business. Moreover, our seasoned funding consultants are dedicated to guiding you through every stage of the process.