Are you planning to partner with an invoice factoring company? Is this the first time that you are going to pursue this type of funding alternative for your business and have a lot of questions in mind? You have come to the right place. Here, we have put together a list of frequently asked questions along with the answers to help you decide if invoice factoring is the right solution for your business. Let’s get started:
What is invoice factoring?
Invoice factoring is the process of selling your account receivables to an invoice factoring company for a percentage of the value. A business can get up to 99% of the value of the invoices from BETALD. Once the customers pay the invoice, the factoring company pays you the remaining amount minus the factoring fee. It is an alternative financing option that can help businesses of all sizes, especially the small and medium ones.
How can invoice factoring help my small business?
With invoice factoring, you get an immediate flow of cash for your business. This cash can be used to meet payroll, provide working capital, pay taxes, increase advertising, improve your credit rating, replenish inventory, buy equipment and a lot more.
How is factoring different from getting a bank loan?
Getting a factoring service is much easier than getting a bank loan. While making the decision of whether to provide funding for your business, a factoring company mainly focuses on the creditworthiness of your customers. Banks, on the contrary, focus on the financial history as well as cash flow of your company. You get quick funding if you go for invoice factoring, where banks can take weeks and even months to approve a business loan.
Do I have to factor all my invoices?
Do you know what the main benefit of invoice factoring is? You get it when you need it. You don’t have to factor all your invoices. Instead, you can choose the invoices that you want to factor, depending on your cash flow as well as business needs.
How often can I factor my invoices?
The answer is “whenever you need”. There may be months when you don’t need to factor at all and months when you need to factor a lot of invoices. It’s perfectly fine.
Will my company be eligible for invoice factoring if I have a low credit score?
Yes. BETALD is such a platform that lets you get factoring for your business even if you have low credit score.
How long does the entire process of invoice factoring take? On our BETALD platform, you get the money transferred to your account just within an hour after the auction closes.
What are the industries that can use invoice factoring?
We work with a wide range of industries. Almost all the b2b companies can opt for factoring service. Here are some examples: construction companies, trucking companies, oil and gas companies, healthcare companies, staffing companies, manufacturing companies and clothing companies.
Now that all your questions regarding invoice factoring have been answered, it’s time for you to try our BETALD platform!
About the Author: Per Frennbro is the CEO of BETALD, which offers high speed, low cost invoice financing for small businesses. As a serial entrepreneur, Per focuses on helping both small and medium sized businesses take control of their cash flow. Visit https://www.betald.com and see how you can turn your invoices into working capital to help your business prosper.