Does Invoice Factoring Help Businesses Grow?

[Coreyward]

Make selling your company goods or services to other companies or government agencies? If the answer is ""yes"", chances are that the current economic climate is leading to a waiting period of 30, 60 and sometimes even 90 days until you pay your clients. But even if your business has been around for a while to quickly pay - usually within a day - can help to expand capital and the flow of money to employees, suppliers, and to pay other expenses.
Because not every business person familiar with factoring, I thought it would be a good idea to work in this sector forgotten in the world of finance. So what is factoring, then? Factoring is the sale of a business's debtors to provide immediate working capital. Through its accounts factoring a business eliminates the uncertainty of when it will be paid, allowing for better management and planning. For example, let's say ABC porch is a contract with the local municipality to reopen all roads damaged in a particular city. ABC learning that paying it takes 30 to 60 days for the government agency for the work still provides service and other expenses to pay immediately. Efforts to improve and work more efficiently, then ABC sells its invoice factoring company. By doing so ABC is now able to provide advance payment for its accounts usually within one or two days compared to 30 or 60 days.

[jebzter]

The brewing industry is a very different industry than the construction industry. Here in California, the laws are favorable for us. If the invoices aren't paid with in 30 days, the customer by law has to be COD, and after 42 days we are by law to charge a 1% simple interest on the debt. Very rarely do I have a customer that is longer than 40 days on a bill, most write me a check on the spot when kegs are delivered. Not sure how other states laws are, but in CA factoring just eats into our margins for essentially no reason. Interested to hear how others feel about it, potentially in other states.