Financing business needs can be a source of fear and anxiety. After all, taking on yet another financial obligation means adding risk to what your business is already facing. But we are firm believers in the idea that fear should not keep you from exploring every option. It certainly shouldn’t keep you from learning all the details of invoice financing.
Invoice financing is a way of raising cash by factoring your invoices with a company like ours. We specialize in debt factoring in Utah. At any rate, factoring companies buy unpaid invoices from clients in exchange for a service fee. The company selling the invoices turns what is considered a legal asset into cash that can be put right back into the business.
Not Just for Struggling Companies
There are a lot of myths surrounding invoice financing, one of them being that it is a funding solution for struggling companies. It may be true that some struggling companies turn to invoice financing, but it’s not just for them. Invoice financing has been used for centuries by some of the healthiest companies around.
Do not believe for minute that your company benefiting from invoice financing suggests you are struggling or failing. How you raise funds to meet short term financing needs is a completely separate entity. It has nothing to do with your company’s health.
Factoring Fees Are Reasonable and Manageable
Another common invoice factoring myth is that it’s too expensive. Critics say that factoring fees are both unreasonable and unsustainable. We completely disagree, and simple math will prove it were you so inclined to plug in the numbers.
One of the biggest advantages of invoice financing is that things are settled quickly. With traditional loans, you are locked in for years at a time. That means more time for interest to add up. You actually spend more by taking longer to pay.
Bad Credit Isn’t Necessarily an Issue
Above all, there is no need to fear invoice financing due to your company’s bad credit. Factoring companies are less interested in the credit worthiness of their clients compared to the credit worthiness of the customers actually paying the invoices. As long as the invoices you sell to a factoring partner are good invoices from customers with a history of making their payments on time, your company’s credit isn’t as important.
It turns out that invoice financing is one of the best ways for companies with poor credit to meet their short term financing obligations while working to repair their credit at the same time. Invoice financing gives them a funding solution when other types of financing options just aren’t available.
Ask and Learn
We encourage companies interested in alternative financing for short term needs to look into invoice financing. We offer you the same encouragement. Perhaps you fear invoice financing because it is an unknown entity. We get it. Still, don’t let fear get in the way. Ask and learn.
We would be happy to fully explain how our process works. We are upfront about the invoices we buy, the rates we charge, and everything else we do. Before you agree to sell your invoices to us, we want you to be completely comfortable with the arrangement.
Fear of the unknown keeps companies that could otherwise benefit from invoice financing looking elsewhere. That’s a shame. Invoice financing has been a viable option for generations. It could work very well for you.