Invoice Factoring Blog

In today’s tough economy, small business finance can be confusing unless you know the tips for negotiating the best deals, sourcing funding, and most importantly, keeping the cash flow healthy.

A number of financial experts today know that invoice factoring is a proven financial method to stay afloat. Factoring has been around for the last 4,000 years. Over a recent 15-year period, small businesses created some 65 percent of the net new jobs in the private sector, according to a March 2010 report called, “An Analysis of Small Business and Jobs.” (Source: Small Business Administration, Office of Advocacy.)

Probably the most important tip to remain successful in your business is to have sufficient cash flow by planning a budget a year in advance. Remember that outside events will affect your budget planning. For example, what if your main customer goes bankrupt? Or what if another good customer decides to move? Do you know how much of your sales these customers generate? What if two or three of your customers don’t pay your invoice on time?

Invoice factoring is not a lending service – it’s really a discounted purchase. Invoice factoring can help resolve some of these types of issues. It can also make your marketing budget work better, and help you improve operations, increase profits, buy more supplies and pay your bills on time. Whether you are a start up business or one that has been around for many years, companies everywhere in the United States are struggling to make a profit.

Invoice factoring, also known as accounts receivable factoring, provides small to medium-sized business owners with working capital when traditional funding is not available – such as bank loans or credit. Using invoice factoring is one of the most effective ways for a business to raise working capital for ongoing operations or planned expansion.

The financial practice of factoring dates back to the ancient Roman civilization. Here are some of the other items that factoring resolves:

•Has no limits and provides fast results
•Stimulates economic growth, allowing expansion without debt.
•Provides companies with continuous working capital, increasing their cash flow.
•Is accessible and flexible.
•Increases production and sales.

Through careful budget planning, watching expenses and the use of invoice factoring, small businesses can survive and come out of the recent recession on top, which will ultimately create more jobs, and fuel a better economy in the future.