Is Invoice Factoring Worth It?

As a small business owner, you are faced with endless options for business funding. You’ve probably considered a bank loan, a line of credit, an online loan, crowdfunding, bootstrapping, or even a merchant cash advance. Maybe you’ve even considered receivables funding like invoice factoring. There is a stigma that the cost of factoring can be expensive, and at some factoring companies it is. Hidden fees, recourse factoring, and low advance rates can threaten your cash flow instead of improving it. Factoring can sound scary, so is it even worth it?

Invoice Factoring Is Worth It For:

  • Invoice Factoring Startup Businesses needing funding
  • Staffing Factoring to meet payroll
  • Payroll Factoring to lower employee turnover
  • Credit Factoring to build business credit
  • Invoice Factoring Bad Credit for low-cost business funding
  • Growing Businesses needing working capital financing
  • Invoice Factoring Startup Business

Startup business funding for a first-time entrepreneur can prove difficult to secure. Persuading investors in your vision takes valuable time from actually pursuing that vision. Banks and traditional lenders will require a lengthy time in business before funding your startup. This leaves high interest rate financing options with fast repayment periods and insufficient capital for a growing business. Invoice factoring, on the other hand, offers flexible funding to allow for startup business growth. Factoring does not require debt nor equity in your business, so you are free to pursue the path you envision for your startup, with a flexible working capital funding strategy at your back.

Staffing Factoring

Invoice factoring solutions make total sense for staffing companies. Billing clients on credit terms and meeting payroll before client payment means there will be a cash flow crunch. This is where staffing factoring helps staffing companies meet payroll on-time, every time. Your business gets paid immediately for your open invoices, then you pay your employees.

factoring companies for small businesses

Payroll Factoring

This goes hand in hand with staffing factoring, but payroll factoring is applicable to all businesses across all industries. When payroll is not met on-time consistently, employees lose productivity and may even leave the company. This will hurt your business operation, employee morale, and inevitably result in the high costs of a high employee turnover rate. Financing receivables ensures your company meets payroll, keeps morale high, and lowers the employee turnover rate.

Invoice Factoring No Credit Check

Startup businesses or businesses with poor business credit will find it challenging to find sustainable business funding. Poor personal credit can even affect your approval for a traditional business loan. Business receivable factoring does not require a good business credit, so companies looking for working capital funding with poor credit will have the financing they need to build business credit over time. Poor credit factoring unlocks growth potential for businesses across the board. Invoice factoring bad credit can help an entrepreneur achieve greater funding potential down the road as well.

Growing Businesses

Small business invoice factoring gives immediate payment on open invoices. This means that a small business now has the available working capital to grow through small business factoring companies offering working capital financing. Your factoring facility grows with the volume of your sales, so there is no limit to your potential funding. And our CEO says it best, really. “Factoring is a revolving line of credit on your receivables.”

is invoice factoring worth it

Is Invoice Factoring Worth It?

Ultimately accounts receivable funding can help businesses of all shapes and sizes. The need for working capital and healthy cash flow is universal in the business world. What business owner is not trying to scale their business? In order to grow, you need capital. Invoice factoring eliminates the waiting period, so your business can ‘soar.’

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