Invoice factoring is a way to sell your invoices at a discount in exchange for a lump sum of money. The invoice factoring company then owns the invoice and receives their payment when it’s collected from your customers.
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How Does It Work?
Should you sell your goods to another business, you would send that business an invoice. Your customer has 30 days to pay off that invoice, but you need the money right now. This gap can hurt when it’s time for you to pay your employees.
While you could seek a traditional bank loan, this often involves quite a few steps and usually requires collateral. Even when you qualify, it could take months to actually get the money. Instead, turn to an invoice factoring company, such as Merchant Flow Financial. We buy your invoice for you and advance your money. Once your customer is ready to pay, the funds are forwarded to us.
Benefits of a factoring invoice:
The process to acquire the funds is quick
Since a factoring invoice technically isn’t a loan, it’s easy to be approved
Factoring invoices generally don’t require seizable collateral, such as real estate
- Fast cash — We close the funding gap caused by slow-paying clients.
- Easy approval — Your credit or short operating history won’t affect the approval. We look at the value of the invoice and the trustworthiness of your client.
- No collateral — We offer a risk-free way to get the money you need.
Should You Go With a Factoring Invoice?
You need quick cash
You can’t wait for the invoice to be paid and you need cash on the fly
The associated fees won’t be damaging
Factoring invoices come with fees, but if they’re not too unaffordable, this option will be good for you.
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