Invoice Factoring Blog

Link: http://www.ifgnetwork.com

This year's economic slowdown is taking a toll on manufacturing businesses globally. Why? It's mainly a cash flow issue. Manufacturing not only requires overhead expenses, but also the purchasing goods or raw materials and people to work and help assemble the company's manufactured products. Most of these costs have to be paid before you get any income from customers, as they pay for a final product.

When your company does not get paid for its products and services for 30, 60 or even 90 days, paying these up front bills can be a stretch. And it won't do much good to try and get a traditional loan. Start up manufacturing companies typically do not have the necessary credit history to get a loan.
On top of the problem of getting financed, there are interest costs, loan origination fees and other expenses.

Invoice factoring can help your manufacturing company get the funds required to stay in business. It is basically an advance of the funds you are owed, and will be getting 30, 60 or 90 from your customers. An invoice factoring company takes approved invoices and then gives you an advance on the money – essentially buying the invoices from you. You get the capital you need, while the factor collects the invoice and keeps the money.