Factoring, or accounts receivable financing, is an alternative lending option that could benefit your business. Some types of businesses benefit more than others, though. Factoring isn’t for every business. Here are some of the industries that can use factoring to get working capital.
Trucking
No matter what you’re transporting, it’s likely that you have outstanding invoices that are preventing your business from taking on more loads. You can get working capital quickly through accounts receivable financing to keep your trucks on the road and have the working capital to grow and expand your business.
Government contractors
Even though you have promises of funding, the government isn’t known to pay promptly. Several things can stop your invoices from moving through the system to get paid. Factoring can make sure projects get finished on time without worrying about funding.
Service Providers
Whether it’s healthcare, consulting or cleaning, in the service industry, you may wait for clients to pay invoices. Giving clients time to pay is a nice benefit for them, but not so much for your accounts. Turn those invoices into working capital through factoring.
Construction
Construction companies face many of the same issues mentioned above. Slow-paying clients holding up funds that you need to pay your own vendors. Accounts receivable funding can often be processed in as little as 24 hours. It’s not based on your credit, but that of your clients.
Benefits of Factoring
Factoring does not require a long history in business or a great credit score. Your business has access to fast cash that you can use however you see fit. You have more time to focus on your business instead of worrying about capital. The factor handles collecting on your invoices. You could free up your billing department’s time and your own.
Get more information about factoring and other lending options when you contact 5 Star Funding Group.
