Is Your Business a Good Candidate For Accounts Receivable Factoring

Do you know if your business is a good candidate for invoice factoring services? The reality is that a business in almost any industry that creates a business-to-business invoice for a service or a product delivered is a good candidate for factoring. In fact, the industries that can participate in factoring vary. We have all heard of construction factoring.

The construction industry is one of several sectors that can benefit tremendously from invoice factoring. No longer is the sub-contractor, or construction company, required to wait for payment before starting on the next phase of a project, or begin construction on a new project.

Accounts receivable factoring allows the sub-contractor or construction firm to realize a quick turnaround – sometimes within 24 hours – on accounts receivable due for completed stages of a construction project. With construction invoice factoring, the construction company, or sub-contractor, can be paid virtually overnight for these accounts receivable, thus speeding up cash flow and improving the company’s ability to begin the next phase of construction.

Very few factoring companies offer construction factoring…in fact, it is easy to get the cash you need without any lengthy and aggravating lending process. So, if you, or your construction firm is interested, or in need of, short term financing against completed construction jobs, or desires immediate payment for finished project stages, look for a reputable factor online by using the key words “construction factoring.” Immediate working capital is available immediately.

Why is credit so important to a small business owner today? Lenders evaluate a number of credit factors when a potential borrower comes knocking. It is known as resource management, a prime consideration when a lender is granting (or not) a loan. What this means is that you as an entrepreneur, along with any business partners, are capable of managing the business’s resources.

Most lenders will look at working capital, debt to worth, and the rate at which income is received after you earn it. Also factors include the rate at which debt is paid after its due, as well as how fast your company moves products and or services out to your customers.

This is where invoice factoring comes in as a tool to assist your small business in building credit and good resource management. Let’s say you have invoices outstanding that are due in both 60 days, and 90 days. But you have bills that must be paid this month, employees to pay, and new materials and supplies to buy for production.

Factoring is just another smart way for almost any business to manage your money, and therefore establish better credit. Factoring companies will simply take a look at your customers’ credit – not yours – and can pay within as little as 24 hours.

There are other good candidates for factoring include medical, or trucking, from they could be janitorial to biotech. They could be start-up companies or companies in the midst of a growth spurt.