Can Invoice Factoring Be Almost Free? Interstate Capital Discusses a Surprising Funding Source for Business Owners

SANTA TERESA, N.M., November 28, 2017 (Newswire.com) - Interstate Capital say business people know that loans and advances come with “pricetags.” Access to cash for operating expenses or growth invariably comes at a cost, whether it’s labeled interest on a loan or fees on an advance. The cost of doing business is a constant throughout the history of commerce.

However, one funding source runs counter to this expectation: invoice factoring. Due to the nature of the factoring process and the business services that come with factoring, clients of factoring companies can find that the value of their benefits can come close to offsetting their fees for their advances. With the benefits and services provided at no cost at top factoring companies, factoring can become the one cash flow solution that can end up costing clients little to nothing.

At an online lending site or traditional bank, you receive no services for the interest rates and fees you pay to access the working capital you need. However, when you partner with a leading factoring company, your factoring fees bring you services and benefits that save you money.

An overview of the factoring arrangement starts with some key differences between factoring and other funding solutions. Unlike a traditional loan, factoring your invoices – getting paid upfront for completed work rather than waiting weeks and months to receive payment – speeds up cash flow without incurring debt. You are paid in advance for work you have completed; you are not borrowing funds that you must pay back so the process is a flexible one that grows when you grow and stops when your business is experiencing a down cycle.

In exchange for the convenience and business advantages that come with receiving funds early, factoring companies buy your invoices at a discount. Those discount percentage points represent the fee for factoring. Because the factoring company now possesses the invoices, the responsibility for collecting from a client’s customers and maintaining real-time business records on those collections belongs to the factoring company. The all-important task of eliminating any obstacles to payment – such as incorrect invoices to the wrong parties or missing documentation – becomes a part of the factoring company’s work. In addition, the onus of ensuring that a client’s customers are creditworthy and can be counted upon to pay their invoices falls on the factoring company before the factoring company agrees to purchase the value of a client’s invoice to a questionable customer.

At an online lending site or traditional bank, you receive no services for the interest rates and fees you pay to access the working capital you need. However, when you partner with a leading factoring company, your factoring fees bring you services and benefits that save you money. Your factoring fees can actually be covered by what you’ll save on back office personnel.

At leading invoice factoring companies with advanced technological solutions and full-service operations, factoring clients save time and money with free benefits that include the following: 

• In-house credit department to protect against business loss
• Courteous collections professionals to ensure customers’ on-time payment
• Complimentary invoice preparation and mailing
• Accounting system for client to track all invoices and payments 24/7
• Ability to take advantage of vendors’ early payment discounts
• Cash in hand to enjoy volume discounts on orders from suppliers
• Freedom from costly late fees and added interest charges on bills
• Improved credit scores for lower credit card and loan interest rates
• More time for business owners to focus on sales and increasing profits

With no-charge value-added services, such as bookkeeping, credit and collections support, savings in personnel, software, and avoiding business losses can translate into covering some, most or all of the costs of factoring. Some clients find that the savings they realize in early payment and volume discounts alone translate into nearly enough to cover their factoring fees.

The factoring fees become a minimal business expense that brings a maximum value. When a business owner has a predictable cash flow and is not worrying about payroll, high loan payments, and other expenses, he or she can focus on growing the business and taking advantage of new opportunities, regardless of size or payment terms.

To learn more about how invoice factoring can be a low- or no-cost funding solution, contact Interstate Capital, a trusted leader in the factoring industry since 1993, for a no-obligation cash flow consultation and factoring rate quote.

Press Contact

Cindy Graff Cohen
Phone: 800-422-0766
Email: ccohen@interstatecapital.com

Source: Interstate Capital