How Invoice Factoring Helps Seasonal Businesses
Seasonal businesses are businesses that experience highs and lows in demand depending on the time of year. The changes in seasonal demand affects a business’s finances, from maintaining sufficient inventory to fulfilling customer orders.
Invoice factoring is a common financing option used by seasonal businesses. Businesses can use invoice factoring to get immediate cash advance from unpaid invoices, enabling them to meet peak demand and remain operational during periods of low demand.
Here are some of the ways that invoice factoring helps seasonal businesses:
Because customers take months to pay their invoices, you may lose the opportunity to capitalize on the seasonal growth in demand if you wait for invoice payment. Invoice factoring solves this problem by quickly providing your business with working capital that would otherwise be locked away in the form of unpaid invoices. You can use the additional funding to purchase and stock additional inventory to help meet the seasonal demand of your customers to drive future growth.
Invoice factoring allows seasonal businesses to bridge the funding gap and take advantage of growth opportunities from the fluctuations in demand.
Supports Sales Growth
During busy seasons, your business sales can overtake your readily available cash due to your receivables increasing. Invoice factoring gives you control over your capital and gives you the cash needed to keep paying suppliers, cover daily operations, purchase inventory, and make payroll.
Accelerates Cash Flow Cycle
Waiting months to collect on invoice payments can lead to having to turn down growth opportunities due to having insufficient cash-on-hand. Invoice factoring provides an immediate cash advance, enabling you to pursue more business growth opportunities. The funding you receive through invoice factoring can be used to ultimately generate substantial returns.
Counteracts Lulls In Demand
Seasonal businesses also have very inconsistent cash flow during seasonal lulls. Invoice factoring helps seasonal businesses through these rough seasons, providing upfront advance cash with flexible terms and contract lengths. Seasonal businesses owners also do not need to resort to desperate measures, such as using personal finances for working capital, by using the safer and more consistent financing method of invoice factoring.
Invoice factoring is a great way for seasonal businesses to generate sufficient working capital needed to pursue new business opportunities and maintain cash flow stability throughout the year.
Accel Business Funding has provided invoice factoring and has funded many businesses for more than $380 million. When banks say NO, we say YES to funding in 24 hours!