Stable and predictable working capital is the lifeblood of every business. However, many small and medium businesses in Fort Lauderdale suffer from insufficient capital, mainly due to slow customer payments. The good news is that with factoring services, they can now maximize their working capital in as little as 24 hours.
In this post, we’ll discuss the role of working capital in a business, how factoring works, and how it can boost a business’s cash flow in an instant. Keep reading to see why factoring might be the solution you’re looking for!
What is working capital’s role in a business?
Working capital is basically the amount available to your business that you can reinvest and spend on your daily operations. The bigger the working capital you have, the more opportunities you can seize to boost your profits and expand your business in the future.
The working capital calculation goes like this:
Your short-term assets – short-term liabilities = working capital
When you improve your working capital, you’ll have more financial capacity to pay off any unexpected costs. At the same time, you’ll have more efficient operations and enough resources to accept more orders from clients.
But what are the working capital requirements for every business? It highly depends on the size of your business operations and the type of company you have. But in general, a healthy working capital would be about 1.5 or 2 times your short-term assets divided by your short-term liabilities.
Still, maximizing your working capital as much as possible has its benefits. First, you can easily adjust to higher staffing needs, pay suppliers on time, and survive on customer payment cycles.
How does Fort Lauderdale small business factoring work?
One of the best ways to boost your business’s working capital is through the help of a factoring company in Fort Lauderdale. But first, let’s discuss how this financial solution works and how you can use it for your own business.
Factoring is a type of financing where businesses like yours can sell their invoices to third-party factoring companies like Factoring Express. Upon selling your pending accounts receivable, you’re going to receive a cash advance of up to 97% of your invoice value.
Not only that, you can get this cash advance within 24 to 48 hours. This injects instant funds into your working capital, allowing you to boost your operations without waiting for weeks for clients to pay.
Aside from that, the factoring company will assume responsibility for the collections process. They will conduct all follow-ups to make sure your invoices get paid within a specific period. Once they’ve collected your invoices, they will send you the remaining balance minus a small factoring fee.
However, you should also know that a factoring company could offer two different terms: recourse and non-recourse.
With recourse factoring, you’re liable in case your client fails to pay the invoice. Depending on your agreement with the factor, you’ll either buy back the invoice or replace it with a new one.
Meanwhile, non-recourse factoring frees you from this kind of liability. However, this type of factoring also comes with higher fees and stricter requirements.
How can Fort Lauderdale factoring help boost your working capital?
Here’s how Florida factoring companies like Factoring Express can help your working capital and business grow:
1. Provides instant working capital for your business
While business loans are also a great way to maximize your working capital, factoring offers an interest-free alternative.
Once you sell your unpaid invoices to factors like us, you’ll receive your much-needed funds in just 24 hours. The best part is that you no longer have to worry about excess paperwork or wait weeks for loan approval.
By getting your much-needed capital fast, you can easily meet all your financial obligations, from paying suppliers to settling rent dues.
2. Reduces administrative tasks on your staff
Do you always spend hours on your desk calling and following up with clients to settle their invoices? This is both time-consuming and resource-consuming, especially for small businesses with limited manpower.
If you want to break free from this cycle, it might be time to look for a ‘factoring company near me’. Because once you’ve factored an invoice, factoring companies like us will also take over collections. This means reduced administrative work on your staff, allowing you to focus more on core business activities.
Aside from that, factors like Factoring Express also offer additional back-office support, such as accounting solutions. This way, you can easily keep track of your finances so that you can free up your team from the tedious task of cash flow management.
3. Gives you more resources to accept bigger orders
Fort Lauderdale business factoring services not only give you cash advances but also enough resources to take on bigger contracts. You’ll have enough funds to fill up your inventory, acquire new equipment, and hire more people to accommodate larger orders from your clients.
In the long run, this spells more profits for your business, which will maximize your working capital even further.
The best part is that you can make all these possible while keeping your lines of credit intact for other business opportunities. This way, your operations will be sustainable and geared up for expansion in the near future.
4. Allows you to offer better payment terms to clients
Since you’re going to receive a cash advance on your unpaid invoices, you can offer better payment terms to your clients. For example, instead of asking them to pay in full, you can offer installment terms to give them financial relief.
Overall, this setup will help boost client relationships. Your clients will be more confident in placing bigger or more orders with your company, knowing that you offer flexible payment options.
Again, the factoring company will collect the invoice from your customers. Overall, it’s a win-win situation for you, your clients, and the factoring company you will partner with.
5. Gives you access to funds that grow with your business
Factoring companies like Factoring Express can keep up with your growing invoice value! This means you’ll continuously enjoy a steady working capital even as you expand your business and accept bigger contracts.
Overall, the flexibility and sustainability factoring offers will be an asset for your business. This way, you’ll receive increased support on your inventory needs and funding for new business opportunities along the way.
Here at Factoring Express, we have a funding capital of up to $100 million, ensuring that we can turn your invoices into instant cash immediately. Whether you’re a startup, a growing small business, or a mid-sized enterprise, our factoring services can catch up on your sales volume.
6. Helps bridge financial gaps during slow seasons
During slow seasons, businesses like yours often struggle with reduced sales, which leads to a much lower cash flow. This is the perfect time to convert unpaid invoices into cash with the help of a factoring company like ours.
This way, you’ll have instant funds to cover operational expenses and prepare for the next peak season. At the same time, you can avoid debt accumulation, as many businesses tend to take out loans during slow periods.
Aside from that, factoring allows you to receive your much-needed working capital so you can invest in marketing during slow times. This will help pump up your sales or prepare for the approaching season so that you can get more orders from your customers.
7. Boosts your working capital regardless of your creditworthiness
Is your business still recovering from a bad debt? Or do you own a new business and are still building its credit score? If so, factoring services will be a good source of funding for your unpaid invoices, regardless of your creditworthiness.
Instead, factoring companies like Factoring Express check the credit history of your clients. This way, we can prove their paying capability for the invoice you’re planning to factor. Also, it will save you from potential recourse when clients fail to pay.
And unlike bank loans, approval with our factoring services is much quicker. We can approve accounts on the same day, and you can start factoring invoices right after. Compared to weeks of waiting for bank approvals, factoring is definitely a great financial solution that your business probably needs right now.
Partner with Factoring Express today!
If you’re ready to maximize your business’s working capital, you can partner with Factoring Express today. As a trusted Florida factoring company, we offer fast funding for unpaid invoices.
With us, you can get the amount tied to your invoices in as little as 24 hours. Also, we don’t impose long-term contracts, monthly minimums, or termination fees. With Factoring Express, we take pride in our flexible factoring services, where you can cancel anytime.
If all these sound good to you, contact us today and claim your 1-week free trial! See how we can boost your working capital – no strings attached!
