Running a business is stressful. Funding your business growth shouldn’t be. Read how invoice factoring companies can help you achieve your goals!
Being in business means having to wear many hats and juggle a variety of challenges. The very last thing a business owner wants to experience is a cash flow problem that curtails business operations.
Cash flow and funding issues can arise when outstanding receivables aren’t paid in a timely manner, inventory levels need replenishing, inflation affects costs and even sudden growth opportunities or shifting market conditions arise unexpectedly. In these cases, how can businesses reliably fund cash flow in a difficult economic environment?
With business getting back to normal, owners and leaders may also be faced with the “good problems” of increased sales, but with new or different cash flow issues. As accounts grow, so can outstanding receivables. Unfortunately, this limits a business’s working capital, as you pay out expenses before you’ve collected on your invoices.
The benefits of invoice factoring
First off, what is invoice factoring? Invoice factoring is a type of financing where you “sell” a portion of (or maybe all of) your company’s outstanding receivables to a third party. Why?
The benefits of invoice factoring are as follows:
- A factoring company pays you most of the invoiced amount immediately – thereby creating revenue and cash flow stability.
- Forecasting and planning can be more accurate because you now have a better sense of your assets.
- The invoice factoring company takes on the responsibility of collecting payment from your customers directly.
- A struggling business may have a better chance of staying afloat due to better cash flow.
- Businesses can use invoice factoring as part of their cash flow management toolkit to build inventory or pay for other immediate needs.
- Often, invoice factoring is cheaper and easier to acquire than a traditional loan. This makes it better for short-term funding needs and reduces the headaches of debt management.
- Increasing immediate cash flow allows you to maintain a better credit score by paying bills on time.
- Invoice factoring companies can enhance your business success and your growth potential.
When opportunity knocks, be ready to answer the door
As a business owner, you need money when you need it. You can’t always anticipate growth opportunities or the direction your business will take despite your best efforts.
Take the case of Global Aviation. The company, which provides airline staffing services such as aircraft detailing, baggage and load control services, needed additional financing as expansion grew more rapidly than anticipated.
Traditional sources of capital were unavailable, and Liquid Capital was able to step in to help them access over $40 million of funding since 2016.
“Liquid Capital was instrumental in listening to us and coming up with a game plan on how we could repay our facility balance and right side the operations.”
Carm Borg, President and CEO of Global Aviation
A similar situation occurred for Rayzor Edge Tree Service as it expanded into commercial contracts. By helping the company better understand the benefits of invoice factoring, Rayzor Edge Tree Service has been able to double sales and strengthen its business relationships.
“As a small business owner, it’s helpful to know someone’s got your back because you’re so reliant on yourself for so many aspects of running the business. Having somebody that I can turn to for advice is worth a lot.”
Ray Bowman, Owner and President, Rayzor Edge Tree Service
Other benefits of invoice factoring
Did you know that Liquid Capital’s business model makes it even more advantageous for businesses considering this option?
What makes Liquid Capital different from other invoice factoring companies:
- We develop relationships with clients beyond a simple transaction. We’re business owners ourselves, so we understand the pain points owners experience running their companies.
- Our business model allows clients to control how they engage with our business — and we can provide flexible funding when you need it.
- Our clients do not get tied into long-term contracts, termination fees or minimums.
- By joining our referral program, you can, in turn, help your clients access quick and flexible funding when traditional funding options aren’t available. If you’re a commercial lender, BDO or other funding professional, reach out to learn more.
Ultimately, all businesses want high-value service that meets their needs. Liquid Capital does that by taking the time to build a structure around the client’s individual needs – which leads to freedom and the ability to choose.
By giving clients the control they desire, Liquid Capital can keep costs down for clients and provide a best-in-class service in a timely and efficient manner.