You may have worked for a few years developing some special skills. Or, you may have gone to school and learned some special things or developed a talent. Now, you want to take those things that you have learned and developed and put them to good use by starting your own business. You will probably find that it’s not so easy.
Unless you have a wallet that is stuffed with an almost endless amount of cash, you’ll probably find that having enough capital is a serious problem. Even if you don’t have problems selling what you offer or make and having enough capital at the end of the day will likely become a roadblock. You have used your cash to make and service your products, now your having to wait to be paid.
This is a very common problem. What makes the problem even worst is that you don’t want the word getting out that your new business can’t handle bigger projects.
Sure, you could apply for a loan at the bank, but you’re a new business and your business has no history behind it. Banks usually won’t make these types of loans. And, it takes time to apply and make these type of possible loans to be only told “No” after waiting all that time
.This is where a new business needs help and that “help” can come from accounts receivable factoring (also, called invoice factoring).
Factoring Provides Capital for a New, Young Business
Lack of capital is a big reason many new businesses fail. Nearly ½ of entrepreneurs that have failed state that this was their biggest problem.
Many new business owners will borrow money from their relatives or friends. Or, they’ll get themselves in trouble by taking out too much personal debt. In any of these events, you have somebody or someone constantly looking over your shoulder.
Accounts receivable financing can provide that cash and capital that the business needs. It’s using your own money that is currently tied up in receivables to finance your growth. Banks won’t do it, but a factoring company will. They will give you an advance on your own money!
Best of all, a factoring company can do it quickly. The first time you apply, it may take 3 – 4 days. After that initial application, it can be done in less than 24 hours! Use that money that you get in any way you want – buy inventory, pay employees, buy capital equipment. It’s your choice.
Factoring Takes a Lot of Responsibility Off a Young Business
After providing you capital for your unpaid receivables, the factoring company will assume responsibility for the unpaid receivables. Your staff will not have to spend time collecting and documenting them. Once the receivables are entirely collected, the factoring company will issue you a check for the balance collected, less the small factoring fee that the two of you had agreed to. This will save your staff a lot of time.
Factoring Will Help Protect You from Bad Debt
Giving credit to a customer who can’t pay their bills can be devastating to a company. It can quickly ruin your business. That is why screening your customer’s credit is so important. A factoring company will do this for you. Usually, they will do it better and faster than you would. This will save you even more time.
A Young Business Wants to Keep Debt Off Their Books
A factoring company is buying your accounts receivable. This is not a debt. You have no interest charges to pay nor any loan origination fees. You own the invoices and you are selling them for a small fee. That’s it… end of story.
In Summary… Factoring Will Help you in Starting Your Own Business
Starting a new business is not easy. Many will fail. Factoring, however, might be the" Ace" that you are looking for. It can be a source of capital when you need it, provide you with overall assistance, and give you stability.
Find out if your business is ready for factoring. Give me Charles at Caps Funding, LLC a call and the two of us can talk about it. Pick up your phone and dial (803) 429-3686.