Everyone has a dream of becoming their own boss. No one in this world likes to work under someone. But, most of
them are working under their bosses because of two reasons, either they do not have a dream to establish their own business or if they have a dream then they do not have sufficient funds to embrace that.
In such a case, is there any solution for the funding issue?
Absolutely yes. Invoice factoring company is trending these days. If you are a wholesaler or an entrepreneur, then these factoring companies can be of your great help.
To eradicate the confusion let’s understand the implementation plan of the Invoice factoring company
An electronics company in Miami is looking for instant cash in order to expand its business. The company doesn’t approach to a traditional bank, rather it decides to approach to the factoring company from where it can receive instant cash. The procedure is known as Accounts Receivable Lending.
Now, the electronics company sold some of its products to a customer and the invoice time period for the customer was 30 days. But, in those 30 days, they plan to expand their business and get new products that can be sold to the customers. So, the company decides to take cash from a factoring company. The cash that is given through the Accounts Receivable lending procedure is approximately 70-85% of the invoice bill that is due.
The moment the customer will pay the pending invoice (say in 30 days), the electronics company would receive a rebate. This rebate will be given by the factoring company plus a fee would be charged by the factoring company which would be just 1-2% of the invoice bill.
There is a benefit for both the electronics company as well as the factoring company.
Why the wholesalers do not prefer traditional banks?
Traditional banks are definitely an option to get cash. But, there are immense drawbacks. Let’s see:
- The banks do not offer instant cash
- Their verification process takes several days
- Even if the verification process is cleared, it is not necessary that the company will get loan from the bank
- The startup companies are generally rejected by the traditional banks
Factoring companies are the best solution if you are looking for instant cash. These companies are reliable and also there is a guarantee that through this solution you will be able to expand your business.