“I have a lot of account receivables which are due in the next 60-90 days. Can I get finance against them?”- A customer.
Yes, You Can! With Invoice Factoring!
So What Is It?
Simply put, the sale of the invoice is termed as “Invoice Factoring.” In it, you are selling your account receivables rather than asking for a loan. This way of getting fund is best-suited if you are a small business that does not have a long credit history and doesn’t have substantial assets either. A thumb rule is, “If your business is garnering less than USD 2.5 million in revenue, you should go for invoice factoring.”
Benefit-1: Improved Cash Flow and Working Capital in Hand without Incurring Debt.
As it is not a loan, invoice factoring can help you with the funds you need quickly with minimal credit requirements. It means you can get the working capital
- without impairing your credit limit,
- without having to incur debt,
- and without impacting your credit rating.
But if you try for a small business loan instead of invoice factoring, from a bank or any alternative lender, the debt will impact your credit history and may make it challenging for you to get another loan.
Benefit-2: Easy Qualification
To qualify for invoice factoring, you should have creditworthy customers. As a business owner, you will not have to maintain high credit ratings to sell the invoices. You need to ensure that you have made credit sales to those customers who are creditworthy or who will make the payment of the invoices when it is due.
Benefit-3: Potential to Improve the Credit
You will have generated increased cash-flow through invoice factoring which can improve the credit ranking. Once you have factored the receivables, you will have more money available to you immediately. You will be able to pay those who have extended credit to you. In this way, you can maintain good standing with other creditors. Your business credibility depends mainly on the timely payment of bills and not tapping on the available credit. If you have been consistent on these things, your credibility increases manifold. And it is where factoring of account receivables matters the most. The cash flow which is provided by factoring will help you pay the bills on time. With less use of credit, it will improve the credibility, and the indicators will show that as well.
Benefit-4: No Restrictions on Usage of Funds
Funds you get through invoice factoring are not subject to any restrictions. As a business owner, you will decide how you are planning to use the funds. When you take a business loan, you will have to use it for the specific purpose for which the loan was taken. It means that you can use the funds to get new customers rather than chasing the debtors. You will be able to extend the credit line to your loyal customers who need credit facility. You will be able to pay to your suppliers timely, and there be no constraints on the supply chain.
What does it take to Get Invoice Factoring from AdvancePoint Capital?
You can get Invoice Factoring from AdvancePoint Capital and avail all the benefits mentioned above. Your company can sell the invoices in two installments:
1st Installment-The first installment is about 80% of the total invoice value and is deposited the day after the request for the funding is made.
2nd Installment- When you pay the invoices in full, the remaining amount is paid after deducting the processing fee.
Get Invoice Factoring Now!
- Single page application
- Account Payable and Account Receivable reports
- No Credit Score Check is needed