Invoice factoring advantages beyond fast cash
April 16, 2021
At some point, most businesses need to boost their cash flow, and for a wide variety of reasons. Making payroll, increasing inventory, beefing up business development, rolling out new product SKUs, keeping the manufacturing line running smoothly — the list goes on. In recent years, however, traditional funding and credit options have restricted growth, leaving business owners and CFOs crunching the numbers to keep operations on solid ground.
In particular, this can be crippling for newer companies or those with less-than-perfect credit. In some instances, these companies may find it extremely difficult and time-consuming to secure any type of credit. For established businesses who have seen all varieties of cash flow challenges over the years, it can also be exhausting searching for a reliable funding source.
For these companies, and the finance professionals who work with them, there are a variety of alternatives to traditional bank financing available. One unique option is invoice factoring.
What is invoice factoring and how can it help businesses?
Rather than a traditional bank loan or business line of credit, invoice factoring is effectively a way of selling invoices for cash. Invoice factoring companies pay an advance on the value of outstanding invoices.
This means businesses can get paid up-front without having to wait 30, 60 or even 90 days on their usual payment terms, which can have a major positive uptick on their cash flow situation.
How does invoice factoring work?
There are a few simple steps to setting up an invoice factoring account and receiving the working capital:
- The application is submitted with supporting documents to open the factoring account
- Outstanding invoices are submitted to the invoice factoring partner
- The factoring company provides an advance, typically within a couple of days, for a majority of the total value of the invoices
- The factoring company receives payment directly from the customers
- When the invoices are paid, the factoring company repays the balance to the company, minus its fee
Choosing the right invoice factoring partner
Like the clients we help, Blacksail Capital Partners is a company of finance industry experts with an entrepreneurial mindset. Not only do we understand the financial challenges that businesses can go through, but we also have the means to help you overcome them.
We also understand the markets and key players. Each of our experts has in-depth knowledge and experience working closely with other finance professionals in banks and lending institutions, who have clients that could take advantage of invoice factoring. Likewise, we work directly with business owners, CFOs and leaders that can benefit from the flexibility and opportunities that invoice factoring can bring.
At Blacksail, we’re able to provide finance professionals with a wider range of options, which they can confidently recommend to their clients. We then work closely with those companies to provide the funding they need, quickly, without them being required to give up control or equity. This can allow your clients to fund new ideas or take advantage of new opportunities, as they arise.
Ultimately, we’re dedicated to providing the finance needed to help you and your business clients succeed.
Partnering with Blacksail Capital Partners, you could leverage invoice factoring up to $10 million. Contact us today to learn how to receive immediate financing by selling your credit-worth B2B invoices today.