Advantages of Invoice Financing

Invoice factoring, also called accounts receivable financing, is one of the oldest forms of commercial lending. In the ancient world, it was used by merchants and factors to help pay for expeditions. The longevity of this type of lending is a testament to how beneficial it can be. Today, there are still plenty of reasons to choose invoice financing.

No Debt

One of the biggest reasons people decide to factor their invoices is to get funding without having to take on debt or sacrifice equity. Your accounts receivable are assets that you can sell. This means that you can avoid many of the downsides of common types of financing.

Limitless

The amount you can borrow using accounts receivable financing is only limited by your current invoices. If you make more sales, you can keep getting more money. There is no limit placed due to your credit score or based on your current loans. Again, you are simply selling an asset. So, you really aren’t borrowing money at all.

Easy to Qualify

Many new businesses or ones that have struggled with poor cash flow have a hard time getting approved for traditional commercial financing. However, they can factor their invoices because the decision is based on the customers’ credit histories. If your business is selling to reliable customers, you can likely get funding.

Fast Turnaround Times

Accounts receivable financing tends to be a fast type of funding. Since there aren’t the usual arbitrary loan board decisions with seemingly endless paperwork, the process can turnaround quickly. That means that you can get money faster to invest in your business’s growth and success. That can be a major difference-maker for many companies.

Funds Can Be Used Any Way

If you take out a real estate loan, you have to use it for buying, refinancing or renovating real estate. If you take out an equipment loan, you must use it for equipment. However, if you factor your invoices, you can use the funds for anything. There are very few types of commercial financing that are as flexible as factoring in terms of use.

Learn More

Discover more about how to factor invoices and see if it could be the right option for your business. This can be a very useful way to get funding, especially if you have a new company or have struggled with hard financial times. Get started today and determine if this is the right choice for you.

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