
{"id":13293,"date":"2022-06-15T17:16:45","date_gmt":"2022-06-15T17:16:45","guid":{"rendered":"https:\/\/liquidcapitalcorp.com\/?p=13293"},"modified":"2022-06-16T12:49:51","modified_gmt":"2022-06-16T12:49:51","slug":"invoice-factoring-for-small-business","status":"publish","type":"post","link":"https:\/\/liquidcapitalcorp.com\/fr\/blog\/invoice-factoring-for-small-business\/","title":{"rendered":"Invoice factoring for small business: what you need to know to grow"},"content":{"rendered":"<p><em>Invoice factoring for small business explained: How owners and financial decision-makers can increase their cash flows with more reliability.<\/em><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-17628 size-large aligncenter\" src=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-1030x618.jpeg\" alt=\"invoice factoring for small business\" width=\"1030\" height=\"618\" srcset=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-1030x618.jpeg 1030w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-300x180.jpeg 300w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-768x461.jpeg 768w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-1536x922.jpeg 1536w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-2048x1229.jpeg 2048w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-1500x900.jpeg 1500w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/invoice-factoring-for-small-business-705x423.jpeg 705w\" sizes=\"auto, (max-width: 1030px) 100vw, 1030px\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Whether a company needs to raise working capital, accelerate business growth, hire new talent or buy new equipment, <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/funding-solutions\/invoice-factoring\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">invoice factoring<\/span><\/a><span style=\"font-weight: 400;\"> is a popular choice of funding. Organizations of all sizes seeking an alternative to bank loans can quite literally cash in with this strategy. When banks can\u2019t unlock funding due to limited or poor credit history and other criteria that can\u2019t be met, invoice factoring for small business can be particularly advantageous.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you work with the right <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/about-us\/the-liquid-capital-difference\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">invoice factoring company<\/span><\/a><span style=\"font-weight: 400;\">, your business can operate with less stress when dealing with <a href=\"https:\/\/liquidcapitalcorp.com\/blog\/how-to-deal-with-non-paying-customers\/\" target=\"_blank\" rel=\"noopener\">slow-paying customers<\/a> \u2014 and have access to the money you\u2019ve already earned (aka, invoiced).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, you may be wondering, \u201cHow do I quickly assess different factoring companies and find the right one who will benefit my business the most?\u201d<\/span><\/p>\n<h2>Questions you need to ask when selecting an invoice factoring company<\/h2>\n<p><span style=\"font-weight: 400;\">When you begin your search for a factoring partner for yourself or your client, be sure to ask these quick questions:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How long has the invoice factoring company been in business?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">What is their industry expertise?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Do they offer funding options other than invoice factoring?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Can you see some <a href=\"https:\/\/liquidcapitalcorp.com\/industries\/client-testimonials\/\" target=\"_blank\" rel=\"noopener\">customer testimonials<\/a> and <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/industries\/case-studies\/\"><span style=\"font-weight: 400;\">case studies<\/span><\/a><span style=\"font-weight: 400;\">?<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How much will it cost me to factor with them?\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">How quickly does it take to get approved for invoice factoring?<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Your answers should match your business needs and help you decide if the factoring company can get you the funds you need.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For a more in-depth guide, take a look at our <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/other-resources\/invoice-factoring-guide\/#question-01\"><span style=\"font-weight: 400;\">free invoice factoring guidebook<\/span><\/a><span style=\"font-weight: 400;\"> that features ten questions that will help you pick the right factoring partner for your company.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<blockquote><p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft wp-image-17631 size-medium\" style=\"border: 1px solid black;\" src=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover-300x190.png\" alt=\"Invoice Factoring guidebook\" width=\"300\" height=\"190\" srcset=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover-300x190.png 300w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover-1030x654.png 1030w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover-768x488.png 768w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover-705x448.png 705w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2020\/12\/Invoice-Factoring-guidebook-cover.png 1123w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p><span style=\"font-size: 18pt; color: #ff6600;\"><em><a href=\"https:\/\/liquidcapitalcorp.com\/other-resources\/invoice-factoring-guide\/\" target=\"_blank\" rel=\"noopener\"><i><span style=\"font-weight: 400;\">Learn the critical questions you should ask any invoice factoring provider in the Invoice Factoring Guidebook<\/span><\/i><\/a><\/em><\/span><\/p>\n<p><span style=\"color: #ff6600;\"><strong><a href=\"https:\/\/liquidcapitalcorp.com\/other-resources\/invoice-factoring-guide\/\" target=\"_blank\" rel=\"noopener\"><b>Access the complete guide.<\/b><\/a><\/strong><\/span><\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><\/h2>\n<h2><b>Accelerate your cash flow in four simple steps<\/b><\/h2>\n<p>If you know invoice factoring is the right choice to accelerate your cash flow, here are four simple steps in the process to help you access capital:<\/p>\n<p>&nbsp;<\/p>\n<h3><b>Step 1: Do your invoice payment terms qualify for factoring?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">If you have invoices that are due in the short term (for example, in 30, 60 or 90 days), these could be the right invoices for factoring.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Selling them to a factoring company can provide you with immediate cash flow, as invoices with much longer terms may not always be eligible.\u00a0\u00a0<\/span><\/p>\n<blockquote>\n<h3><b>Related: <a href=\"https:\/\/liquidcapitalcorp.com\/blog\/tired-of-business-cash-advances\/\" target=\"_blank\" rel=\"noopener\">Is your cash flow suffering from 90 day payment terms? Invoice factoring can help<\/a><\/b><\/h3>\n<\/blockquote>\n<h3><\/h3>\n<p>&nbsp;<\/p>\n<h3><b>Step 2: Sign a factoring company agreement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Once you\u2019ve selected a <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/funding-solutions\/additional-solutions\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">factoring company<\/span><\/a><span style=\"font-weight: 400;\"> (also called the \u201cfactor\u201d), you\u2019ll sign an\u00a0 agreement that marks the beginning of a formal business relationship.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The agreement will outline what account receivables (ARs) or invoices the factor is purchasing, along with other terms and conditions that will help fast-track future financing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you\u2019re <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/partners\/referral-partner-program\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">referring a client to Liquid Capital<\/span><\/a><span style=\"font-weight: 400;\">, establishing a long-term partnership with your Liquid Capital Principal can open new doors for your business.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><b>Step 3: Calculate how much working capital you need for your goals <\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Based on your immediate and long-term plans, you probably have an idea of how much capital you need flowing into the business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you meet with your factoring partner, come ready with that number. With invoice factoring, you can calculate how much working capital you\u2019ll have access to once you factor your invoices. And your lending partner can also help you with these calculations.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Once you know exactly how much cash is being injected into your cash cycle, you can plan to move forward with business operations. For example, you can begin the process of buying inventory or hiring new employees for a busy season \u2014 knowing that you can now afford to make these strategic decisions.<\/span><b><\/b><\/p>\n<p>&nbsp;<\/p>\n<blockquote><p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-16930 size-medium alignleft\" style=\"border: 1px solid black;\" src=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-300x190.jpg\" alt=\"\" width=\"300\" height=\"190\" srcset=\"https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-300x190.jpg 300w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-1030x651.jpg 1030w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-768x486.jpg 768w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-1536x971.jpg 1536w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-2048x1295.jpg 2048w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-1500x949.jpg 1500w, https:\/\/liquidcapitalcorp.com\/wp-content\/uploads\/2022\/05\/LCEB130_LC_Cash-Cycle-eBook_cover-705x446.jpg 705w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p><span style=\"font-size: 18pt; color: #ff6600;\"><em><i><\/i><i><a href=\"https:\/\/liquidcapitalcorp.com\/cash-cycle-guide\/\" target=\"_blank\" rel=\"noopener\">Learn more the Ultimate Cash Cycle Guidebook<\/a><\/i><\/em><\/span><\/p>\n<p><span style=\"color: #ff6600;\"><strong><b><\/b><b><a href=\"https:\/\/liquidcapitalcorp.com\/cash-cycle-guide\/\" target=\"_blank\" rel=\"noopener\">Access the complete guide.<\/a><\/b><\/strong><\/span><\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<h3><\/h3>\n<p>&nbsp;<\/p>\n<h3><\/h3>\n<h3><b>Step 4: Plan the timelines to collect your reserve<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Once the client has paid your factoring partner the outstanding invoice, the factoring company will be able to release the balance of the \u201creserve fund.\u201d This final amount gives you additional working capital, which can be a welcome cash inflow.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Work with your factoring partner to understand the timelines for collecting the final reserved funds, and you\u2019ll have a better understanding of your inflows. You may plan for these reserves as \u2018top-ups\u2019 to buy additional goods or services, or to act as a buffer in the event of unexpected cash outflows.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<blockquote><p><b><i>Related: <\/i><\/b><a href=\"https:\/\/liquidcapitalcorp.com\/other-resources\/ultimate-factoring-encyclopedia\/#reserve\"><b><i>See the definition of \u201creserve\u201d here, plus other important factoring terms.<\/i><\/b><\/a><\/p><\/blockquote>\n<h2><\/h2>\n<p>&nbsp;<\/p>\n<h2><b>The right solution at the right time\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Invoice factoring has gained popularity in recent years because it offers a quick finance solution to all types of businesses, from all types of industries. (But by no means is it a new solution. <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/blog\/factoring-to-grow-business\/\"><span style=\"font-weight: 400;\">Read here for some history.<\/span><\/a><span style=\"font-weight: 400;\">)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are plenty of advantages to using invoice factoring, aside from the obvious need for working capital. But one of the most important benefits is that you\u2019re not adding any more debt to your business. (If you\u2019re ready to learn more, get a head-start and learn all the factoring terminology in our free <\/span><a href=\"https:\/\/liquidcapitalcorp.com\/other-resources\/ultimate-factoring-encyclopedia\/\"><span style=\"font-weight: 400;\">Ultimate Factoring Encyclopedia<\/span><\/a><span style=\"font-weight: 400;\">.)<\/span><\/p>\n<p><span style=\"font-weight: 400;\">By working with a reputable factoring company, you\u2019ll gain a business partner that provides financing when you need it \u2014 and also offers both financial analysis and genuine support that helps you scale your business.<\/span><\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><em><span style=\"font-weight: 400;\">At Liquid Capital, we understand what it takes for small, medium, and emerging mid-market businesses to succeed \u2013 because we\u2019re business people ourselves. Our company is built on a network of locally owned and operated Principal Offices, so whenever you\u2019re talking to Liquid Capital, you\u2019re talking directly to your funding source and a fellow business person.<\/span><\/em><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"color: #999999;\"><em>Images by Pixabay: <a style=\"color: #999999;\" href=\"https:\/\/pixabay.com\/vectors\/money-cash-tree-watering-hand-5530537\/\">Featured<\/a> and\u00a0<a style=\"color: #999999;\" href=\"https:\/\/pixabay.com\/illustrations\/success-growth-walk-businessman-4067990\/\">Secondary<\/a><\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Invoice factoring for small business explained: How owners and financial decision-makers can increase their cash flows with more reliability. Whether a company needs to raise working capital, accelerate business growth, hire new talent or buy new equipment, invoice factoring is a popular choice of funding. Organizations of all sizes seeking an alternative to bank loans [&hellip;]<\/p>\n","protected":false},"author":120,"featured_media":17628,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,144],"tags":[187,161,160,175],"class_list":["post-13293","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-invoice-factoring","tag-accounts-receivable-factoring","tag-factoring","tag-factoring-partner","tag-invoice-factoring"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Invoice factoring for small business: what you need to know to grow<\/title>\n<meta name=\"description\" content=\"Here\u2019s a quick invoice factoring guide for small business that will show you the steps to get funding with a reputable lender.\" \/>\n<meta name=\"robots\" content=\"index, follow, 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