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Small Business Invoice Factoring: Increase The Momentum Of Your Business

In today’s ever-changing economy, running a small business and keeping it afloat can be quite a struggle. In this scenario, business owners have two options: they can take out another line of credit or they can factor their accounts receivable. You should know that staying on top of your accounts receivables is crucial for maintaining healthy cash flow. However, reviewing your receivables and making collection calls takes a lot of time. A small business will find it difficult to survive and streamline their business if the cash flow is affected. Every small business wants to get the cash owed to them into their bank account as quickly as possible. You can opt for small business invoice factoring to address your cash flow. With small business invoice factoring, you can ease the burden of collections and get paid faster by factoring your sales invoices.


There is nothing to worry about when you opt for small business invoice factoring. In fact, it is not a loan. It is very clear that small business need immediate cash for running business but the problem is that small businesses cannot wait for a long time to collect the dues. In this scenario, a small business sell its account receivables to a commercial finance company called a factor at a discounted rate. The factoring company’s charge fees that tend to fall anywhere between 1% and 5% of the total invoice amount. .But the best thing is that factors pay approximately three-quarters of the receivables value immediately with remainder due after they receive payment from your customers.

Working Capital Receivables - Boost Your Potential

A business cannot survive without working capital. It is a well known fact that a business that doesn’t have sufficient funds will not be able to survive in the market for long. Lack of working capital will lead to insolvency and then bankruptcy. Most small and medium-sized owners have about 60% of their working capital tied up in accounts receivables. There is a lot of potential working capital that could be put to use today for funding growth. By selling invoices on an online auction platform, business owners can sell these IOUs for cash now.  If accounts receivables are managed effectively, it will increase the current assets of the company and it will further increase the working capital of the company.

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