One of the most common questions about Factoring of Accounts Receivable is what businesses can benefit from it. The answer must be divided into categories because factoring offers multiple advantages that appeal to different types of businesses.
With Factoring, you don’t have to wait 30 to 90 days to get paid from your clients because you sell your unpaid invoices to a company called Factor. This company pays you immediately and takes care of collecting the payment from your customers in exchange for a small fee.
This is a simple, fast, and versatile process that doesn’t create debt because companies that factor their accounts receivable are using their own money instead of taking out a loan. The distinction is converting the unpaid invoices into cash by factoring rather than taking out a loan to have cash available.
Businesses of all sizes can benefit from Factoring. While banks may hesitate to lend funds to companies without a long credit history and big profit margins, Factoring is available to many different organizations across a wide range of industries, from small familiar operations to big transnational companies
Freight
Factoring allows freight companies to get cash fast and cover critical expenses that can’t wait 30 to 90 days such as fuel, repairs, or insurance. The transportation businesses that can benefit from factoring their accounts receivable include:
- Truck companies
- Owner-operators
- Fleets
- Freight brokers
Services
Common challenges for companies in the service industry include seasonal fluctuations, slow-paying customers, and lack of cash flow. Factoring can solve all these problems, allowing owners of service companies to build their businesses with confidence.
- Information Technology
- Healthcare
- Energy
- Infrastructure
Manufacturing
Factoring is an effective tool that manufacturing companies can use to face regular expenses such as rent, staffing costs, and raw materials. Failing to make these payments can bring a manufacturing company to a halt. Luckily, factoring is available to organizations like:
- Equipment manufacturers
- Fashion companies
- Electronics
- Printing
Wholesale
Factoring of accounts receivable is an ideal fit for wholesale and distribution companies. Fast approvals and flexible requirements give these companies the swift capital infusion they need to fill large orders and meet customer demand.
- Wholesalers of electrical goods
- Building materials wholesalers
- Wholesale food suppliers
- Distribution companies
Learn More About Factoring of Accounts Receivable
Interested in learning more about factoring? These previous posts will help you gain a deeper insight into this effective financing alternative:
- 5 Factoring Terms Every Small Business Owner Should Know
- What Every Small Business Owner Should Know About Factoring
- 4 Reasons Why Factoring Invoices Is a Great Option for Small Businesses
- How to Deal With Slow-Paying Clients
At ACS Factors our mission is to advance the capital you need to move your business forward. We are a Factoring company located in Upland, California, and have many clients in the distribution and logistics corridor which includes Ontario, Riverside, Fontana, Jurupa Valley, and Moreno Valley.
Reach out today by email (info@acsfactors.com), telephone (909-949-5599), or through our social media accounts on Facebook, Twitter, and YouTube to learn more about the benefits of turning your invoices into immediate cash!
