Invoice Financing 5 Reasons Why it Works

There are many different options for financing your business. Keeping working capital on hand for any number of future business objectives is critical. Invoice Financing is one of those tools. Keeping an open mind and utilizing time tested business finance options can be a method any type of business
can utilize. It's fast and has been used by companies for hundreds of years.  

It doesn't matter if the economy is slow and you need cash flow to get thru a rough patch or if the economy is rolling and you need to keep up with production demand Invoice Financing can be a tool you have at your seed when the need for liquidity arises.

Here are a few reasons Invoice Financing should be a source for you to turn to.

   
1. Bank loans can be difficult to qualify for
Even during the best of times, qualifying for bank financing is difficult for most businesses.  With factoring, qualification is primarily based on your customers’ credit, not yours.  Why?  Because factors (companies who buy invoices) don’t lend money, they buy invoices.  Factors will work with companies that have tarnished credit, or very little credit history, as long as their customers pay their invoices on time.

2. Collateral
Bank loans are secured by all your corporate assets and often by your personal assets as well.  Invoice Financers only require a first priority lien on your accounts receivable.

3. Scalability
If you have a bank line of credit, the business opportunities you can pursue are governed by the size of your credit line.  With Invoice Financing, there are no credit line caps to limit your growth.  The amount of capital available to you grows in direct proportion to your sales success.  More sales and larger accounts mean more and larger receivables, which can immediately be financed to obtain the cash you need to service customers and sustain growth.

4. Flexibility
A bank loan creates a long term commitment – a monthly payment and a debt that must be repaid whether the business succeeds or fails.  Invoice Financing simply accelerates the payment of monies your company has already earned, and it can be turned on and off like a faucet.  You can factor all your invoices one month, and none the next.  You can decide which is invoices to factor, and when.  If you need cash to meet payroll or to capitalize on an opportunity, just finance some invoices.  With invoice financing, your receivables become an open line of credit that you can tap into whenever you need more cash.

5. Cost
The fees associated with factoring are competitive among other financing options.  For example, they are comparable to the fees charged by credit card companies to advance cash to merchants on their credit card sales.  Factoring fees could be considered cheaper than bank or credit financing if you take into account all the extraneous fees that banks charge in addition to the cost of funds - application fees, service charges, escrows to maintain, plus the requirement to pledge all your assets.

These are just the top five reasons to consider Invoice financing as an option in your cash flow toolbox. If you are considering obtaining Invoice Financing Purchase order Financing or a Merchant Cash Advance consider NorthWest Finance, a nationwide finance company.

NorthWest Finance
Minneapolis, St Paul, U.S
612-615-8196
www.businessinvoicefinancing.com 

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