Invoice Financing for Your Business Cash Flow Needs

Considering Invoice Financing as an option to increase your businesses cash flow?

There are a lot of companies in the Invoice Financing game. As in any industry some are good some are bad. A little research on sites like rip off report can help you when making your business finance options decisions.  

Invoice and P.O Finance

Since Invoice Financing, Invoice Factoring and Purchase Order Financing have been around for such a long time there may be a couple common misconceptions out there regarding this type of business financing.

First let's explain again what Invoice Financing is. 

DEFINITION of 'Invoice Financing'

A way for businesses to borrow money based on amounts due from customers. Invoice financing helps businesses improve cash flow, pay employees and suppliers, and reinvest in operations and growth earlier than they could if they had to wait until their customers paid them. Businesses pay a percentage of the invoice amount to the lender as a fee for borrowing the money. Invoice Financing can solve problems associated with customers taking a long time to pay and difficulties obtaining other types of business credit.

Let's lay out a few common misconceptions regarding Invoice Financing.

Misconception #1 - Factoring is for troubled Companies. 

This is actually the exact opposite. Accounts Receivable Financing is primarily a resource for newer or rapidly growing businesses. Because with Factoring, the amount of Capital available to a growing business is directly tied to it's sales. More sales create more invoices, which can be immediately financed (factored) and turned into working capital.

Misconception #2 - Your Customers Will Look Down on You if You Start Financing Invoices

As stated above financing invoices creates working capital that can keep you ahead of orders as well as hiring necessary staff and other issues. Most businesses today use invoice factoring to fund expansion and to take on new business, not to rescue their business from the jaws of insolvency.

Misconception #3 - Factoring Companies Upset Your Customers with Collection Calls

Invoice Financing Cash Flow Options

The last thing they want to do is be responsible for annoying one of your customers.  One of the ways factors improve your cash flow is by providing courteous and professional reminders when invoices are overdue.  That way, you and your staff can be free to focus on making money instead of chasing it down.

Misconception #4 - Factoring is Too Expensive

Perhaps the question you should ask yourself is – will factoring help me generate more revenue than it costs?  The cost of factoring itself becomes irrelevant if it will help you make more money, i.e., if it will pay for itself. For example, would you invest 3% of your bottom line to generate a 40% increase in sales? 

Misconception #5 - Factoring is for Large Corporations

This may have been true decades ago, but today factoring is used by businesses of all sizes to accelerate cash flow and growth.  In fact, there are many “small ticket” factors today that will advance as little as a few thousand dollars a month on outstanding invoices to credit-worthy businesses or public sector accounts.

If you are seeking ways to increase your business cash flow contact a company like NorthWest Finance. With many years of experience working with many companies in a variety of industries. North West Finance can provide you with a one time or ongoing Invoice Financing Facility.

NorthWest Finance

Minneapolis, St. Paul, Nationwide

612-615-8196

www.businessinvoicefinancing.com

Invoice Financing | Purchase Order Financing | Equipment Lease Financing | Merchant Cash Advances