In today’s blog post, we take a closer look at the ways factoring can help companies in the service industry. Keep reading to learn more!
What Is the Service Industry?
The term “service industry” refers to companies not involved in manufacturing whose business model is based on activities such as customer service, management, or consulting.
Some common examples of companies in the service industry include:
- IT companies
- Consulting companies
- Marketing agencies
- Security companies
- Financial services
The service industry is becoming increasingly important. For example, according to data from the Bureau of Economic Analysis, the private service sector was the industry that contributed the most to the growth of the U.S. economy in 2021.
How Factoring Helps Companies in the Service Industry
One of the main reasons why factoring is a great alternative for the service industry is that these companies typically lack the assets needed as collateral for a conventional loan.
Unlike other types of organizations, companies in the service industry don’t have inventory they can use as collateral.
Even when these companies have equipment or property, these assets are often leased — and therefore useless as collateral.
The good news is that Factoring doesn’t require collateral. All a company needs to take advantage of factoring is unpaid receivables they want to convert into cash fast.
In addition to gaining the ability to get cash without collateral, service providers can also enjoy other benefits that come with factoring, including:
- Cash flow optimization
- Protection from bad debt
- Being able to take advantage of cash discounts
- Reducing the administrative burden on staff
- More time to focus on their core business
All these benefits translate into better services, which in turn help companies get more customers and grow their business.
ACS Factors: We Turn Your Invoices Into Immediate Cash
Looking for a Factoring company you can trust? We are located in Upland, California, and have many clients nationwide in the distribution and logistics corridor which includes Ontario, Riverside, Fontana, Jurupa Valley, and Moreno Valley.
Reach out today by email (email@example.com) telephone (909-946-5599), or through our social media accounts on Facebook, Twitter, and YouTube, and start converting your accounts receivable into cash today!