Small and medium enterprises (SMEs) are the driving force of the US economy. In fact, small businesses represent about 43.5% of the country’s gross domestic product or GDP and contribute over 61.6 million jobs. But despite playing such a massive role in our economy, many SMEs still struggle with cash flow problems – a dilemma a factoring company can solve in as little as 48 hours.
In this post, we’ll discuss why more and more SMEs are partnering with factoring companies in Florida. Read on and see why it might be the financial solution your growing business needs right now!
10 reasons why small & medium-sized businesses partner with a factoring company
Here are 10 ways a Florida factoring company, such as Factoring Express, can make a huge difference in your cash flow:
1. Turn invoices into cash fast
In some industries like transportation and contracting, payment cycles can stretch to as much as 90 days. And for a small or medium-sized business with limited resources, this spells financial trouble. Many end up getting another loan just to cover operational expenses or delay payments to suppliers.
But with the help of a factoring company like Factoring Express, SMEs like yours can now turn invoices into cash in just 24 to 48 hours. Simply sell us your pending accounts receivables, and we’ll advance up to 97% of the total invoice amount in just a few hours upon your account’s approval.
This way, you can have a steady cash flow even if your clients take forever to pay with nothing but a small factoring fee in exchange.
2. Scalable and flexible funding
Aside from giving you immediate funds, factoring companies can also keep up with the growing size of your invoices and business in general.
Also, factors let you choose which invoices you want to fund and when – giving your business full control and flexibility. This means you can choose to factor invoices from slow-paying customers and retain the rest of your clientele on your in-house collections.
Unlike traditional loans, factoring doesn’t tie you under rigid terms or long payment plans. Instead, you receive the amount tied to your invoice immediately when you need it, saving you from the tedious process of applying for another loan.
3. No credit checks required
Are you a small business owner still reeling under a bad debt? Or is your business still new and in the process of building a good credit score? In whatever situation you’re in, factoring companies like Factoring Express can help.
With our factoring service, we don’t check your credit score. Instead, we take a look at your customer’s credit standing to see if they have a good payment history. For us, what matters is your customers’ ability to pay the factored invoice, not your business’ credit score.
Unlike traditional bank loans, whose approval relies heavily on credit scores, factoring offers a more convenient alternative. This means you can get instant funding to help you rebuild your credit score and boost your lines of credit along the way.
4. Access credit reports of potential clients
Factoring companies not only secure your funding but also the reputation of your business. Before you sign a contract with a potential client, we can check their credit report to see if they are a profitable partner for your small or medium enterprise.
This way, you can avoid non-payments, and you won’t have to pay back the factored amount under recourse terms. It’s a great risk mitigation strategy and helps you find customers with whom you can build long-term relationships.
5. No hefty interest rates
Business loans offer SMEs funding to expand their operations. Whether it’s opening a new location, extending their service areas, or offering more services or products, these loans have been proven to be helpful in fueling business growth.
However, when clients take too long to pay, some small and medium-sized business owners may be forced to get new loans to sustain their day-to-day operations. When this happens, they won’t have enough borrowing capacity when new business opportunities become available. Overall, it stalls their growth, not to mention that they have to keep paying hefty interest rates to lenders.
But when SMEs like yours partner with a factoring company, you can tap on your pending invoices for instant funds. This way, you can preserve your credit lines for your business expansion in the future.
6. Hassle-free collections process
Small and medium enterprise (SME) owners often have to juggle multiple tasks to keep their business running smoothly. From talking to suppliers to handling administrative work, they put on many hats to save funds. And of all the hats they have to wear, collecting payments proves to be the most time-consuming.
Instead of chasing clients for payments, you can partner with a factoring company to get rid of this responsibility. Once you sell your outstanding invoice and receive the cash advance, you’re also passing on the collections to factors like us.
With this, we handle the collections while you focus on running your growing business. You no longer have to spend countless hours doing follow-ups just to receive your much-needed working capital.
7. Increased capacity for more customers
With the steady cash flow that accounts receivables financing brings, SMEs like yours will have enough capital to take on new and bigger contracts. For example, you can maintain a huge inventory to accommodate bulk orders even if your clients take weeks or months to pay their invoices.
Aside from that, you’ll have enough capital to cover upfront costs, including materials, labor, and equipment. You’ll also minimize the need to open another loan to cover all these overhead expenses when accepting new clients while waiting for your previous customers to pay.
8. Plan business expansion with confidence
Many SMEs we’ve partnered with have gained more confidence in planning their business expansion thanks to the predictable cash flow we provide. Since they can receive their invoice amount fast through factoring, they can easily plan the purchase of new equipment, hire more people, or open a new branch.
SME owners can also combine factoring with credit lines to maximize their financial resources. This allows them to have multiple sources of funding that suit their unique needs.
9. Pay employees and suppliers on time
Some small businesses struggle to pay their suppliers and employees on time due to delayed customer payments. This can lead to strained relationships and a tainted reputation, which are bad for your business.
This is exactly what factoring companies like Factoring Express help solve. Instead of waiting for your customers to pay, you can get a cash advance from us so you can meet your financial obligations promptly.
Overall, paying on time can also boost your suppliers’ confidence in your business. In the same light, your employees will be more productive and loyal to your business, knowing that they won’t have to wait for their next paycheck.
10. Offer customers better payment terms
Lastly, invoice factoring services let you give customers better payment terms. Thanks to our cash advances, you’re no longer in a rush to receive their payments, which means you can offer them longer payment terms. This will also help foster a better working relationship with you and your suppliers in the long run.
It also means your suppliers will be more likely to support you on larger orders. It’s because they are confident that you’ll give them favorable payment terms on high-value invoices.
Aside from that, offering extended payment terms will make it easier for you to negotiate with new suppliers or partners. And since you can easily find the best suppliers, your customers will get better service and goods from your business – a win-win situation for everyone!
Do you want to bring all these benefits to your business? Partner with Factoring Express today!
If you’re a small or medium-sized business owner looking to improve your cash flow, Florida factoring companies like Factoring Express are the partners you can trust. We provide a comprehensive factoring service that meets the unique needs of almost every business.
With us, you’ll enjoy invoice funding as fast as 24 hours, so you’ll get the working capital to cover various business expenses. We don’t impose minimums or long-term contracts – you can choose to factor invoices only when you need it. You can also cancel anytime without any termination or hidden charges.
If all these sound good for your business, contact us at Factoring Express today to claim your 1-week free trial! You can also talk to our specialist to learn more about how our factoring service can boost your business’s bottom line.
