- HoneyHat

Manufacturing

Most manufacturers need to buy large quantities of materials and have a large staff in order to run smoothly. Manufacturers must have sufficient cash reserves to cover unexpected expenses and repair costs. Major equipment can be damaged or need to be replaced. This can cause orders to be stalled, even if supplies have been purchased. Repairs for highly-specialized equipment are costly and can cause productivity to be severely affected. Invoice factoring allows manufacturers to have the capital they need in order to be able to adapt quickly, pay for equipment and repairs, buy raw materials and meet payroll.

Wholesale and Distribution

Accessing additional capital is a major problem for wholesale and distribution businesses. These businesses can find themselves in a cash crunch quickly, even with careful financial planning. This is due to high overhead costs such as supplies, payroll, utility bills and advertising. Slow seasons and economic fluctuations make it hard to maintain a steady cash flow. Customers also expect prompt delivery of their goods. However, payments don’t always meet these expectations. Distributors and wholesalers can use the extra cash flow invoice factoring to fulfill orders, get good prices and keep operations running smoothly even during slow periods.

Transportation

Trucking companies have many expenses that must be paid before any freight can be delivered. These include paying drivers, fuel costs, and insurance. Extra cash may be required from time to time to pay for vehicle maintenance or reimburse suppliers. In order to meet the growing demand for “final mile” and short-haul travel, the industry is changing to accommodate ecommerce. Carriers will need to adjust their routes and buy new equipment such as single-unit trucks. Freight factoring allows trucking companies to attract qualified drivers, build their fleet, and pay day-to-day expenses without waiting for clients to pay.

Staffing Agencies

Invoice factoring companies are often partners with staffing agencies because they need consistent cash flow to pay their largest resource, their employees. Staffing agencies often pay invoices at unpredictable times because they recruit for many positions and work in many industries. The long time between invoices being inked and payment can quickly lead to cash flow problems. By factoring unpaid invoices into cash immediately, staffing agencies can free up capital to cover operating costs, pay payroll easily, provide exceptional services and continue to hire top talent.

Professional Services

Combining high-budget projects with slow-paying clients, sometimes 60 to even 90 days in some cases, can lead to serious cash flow problems. Many business service companies find themselves overwhelmed with invoices and no working capital. Factoring invoices helps them bridge the gap in cash flow between when they deliver services and when they receive payment. These companies have easy access to capital and can cover their operating expenses. They can also expand in new areas and continue with their well-structured plans .

How does the invoice factoring process work?

Invoice Factoring is quickly becoming a popular method for quick cash access and simplicity. Partnering with a factoring firm can allow you to access capital in days, or even less than 24 hours. These are the five steps that you need to follow:

Step 1

Your company serves its customers by offering a product or service and then issuing an invoice within 30 to 90 days.

Step 2

After your business is approved by the factoring company, a contract between you and them detailing all rates and limitations is signed.

Step 3

The factor will accept your invoices and you can sell them.

Step 4

The “advance fee” is the initial advance you receive. The average advance rate is between 80% and 95%. However, it will depend on the size of your transaction and your industry.

Step 5

After receiving payment from your customer the factor will wire any balance remaining on the invoice to your bank account.

Security Business Capital’s Invoice Factoring Services

Security Business Capital’s dedicated team is the best choice if you’re looking for an invoice factoring agency to establish a long-term, productive relationship. We have years of experience in providing flexible cash solutions to businesses that boost cash flow. We have solutions for many industries, including manufacturing, distribution and transportation.

The post 5 Large Volume Industries That Benefit From Invoice Factoring Services was first published on Security Business Capital.