THERE ARE MANY BENEFITS TO USING A FACTORING COMPANY FOR INVOICE FACTORING OR INVOICE FINANCING.
IN SHORT INVOICE FACTORING OCCURS WHEN A COMPANY'S CUSTOMERS PAY ON TERMS, SO RATHER THAN WAIT FOR SETTLEMENT TERMS OF 30-60- 90 DAYS OR MORE FOR YOUR SETTLEMENT , YOU SELL YOUR COMPANY'S INVOICES FOR A DISCOUNTED RATE TO A FACTORING COMPANY. IN TURN THE FACTORING COMPANY (AFTER YOUR COMPANY HAS BEEN SET-UP WITH THE FACTORING COMPANY) USUALLY PAYS YOUR COMPANY UPWARDS OF 70 TO 98% OF THE INVOICED AMOUNT, OFTEN TIMES IN AS LITTLE AS 24 HOURS. THE FACTORING COMPANY PROVIDES FREE CREDIT CHECKS ON YOUR CUSTOMER, INVOICES YOUR CUSTOMER, SAVING YOUR COMPANY THE INCONVIENCE .
ONCE THE FACTORING COMPANY RECEIVES PAYMENT FROM YOUR CUSTOMER, THE FACTORING COMPANY PAYS YOUR COMPANY THE REMAINING SETTLEMENT LESS THEIR FACTORING FEE. THIS FREES UP YOUR COMPANY'S CASH FLOW AND ALLOWS YOUR COMPANY TO PAY CREDITORS, ETC. WHILE BUILDING BUSINESS CREDIT,. THIS ALLOWS YOUR COMPANY TO GROW TO IT'S FULLEST POTENTIAL.
THERE ARE MANY BENEFITS TO INVOICE FINANCING AS WELL.
THE END RESULT FOR YOUR COMPANY HAS SOME SIMILARITIES IN RECEIVING FUNDS QUICKLY TO FREE UP CASH FLOW BUT YOUR COMPANY REMAINS RESPONSIBLE FOR INVOICING YOUR CUSTOMER. USUALLY THIS IS A SHORT TERM METHOD OF FINANCE. TYPICALLY THE FUNDED AMOUNT IS USUALLY LOWER THAN INVOICE FACTORING AND THE FACTORING COMPANY'S FEES ARE ARE AT A DIFFERENT RATE, USUALLY LESS THAN INVOICE FACTORING. IN BOTH INSTANCES, DEPENDING ON WHICH METHOD IS MORE SUITABLE FOR YOUR COMPANY, THERE ARE MANY BENEFITS TO INVOICE FACTORING AND INVOICE FINANCING.
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