Invoice Factoring: Helping Through an Economic Crisis
Due to the COVID-19 pandemic, the economy has taken a sharp dive, leaving everyone worried about the future. Small businesses, especially those that were forced to shut down because of state mandates, are in a precarious position. Bank loans can be difficult to obtain during these times given the multitude of loan requests from other businesses. In addition, banks are currently exercising extreme caution in providing loans. As a result, the approval process time for a bank loan, ordinarily ranging from 30 to 60 days, has now doubled. It is harder than ever for businesses to rely on a bank loan.
Most business owners are wondering whether they will be able to keep their business afloat. Thankfully, invoice factoring can help save your business.
How Invoice Factoring Can Help You Now
Here is how invoice factoring works: Instead of waiting months for your clients to pay their invoices, you can sell your outstanding invoices to an Invoice Factoring company. Once the factoring company has approved the invoices, you will receive immediate cash payment and the factoring company will assist in collecting the invoices. Having adequate working capital during a downturn in the economy is essential. Rarely do business owners want to take on additional debt during uncertain economic times. That is why invoice factoring is helpful to business owners: you get an advanced payment on the outstanding invoices that are already owed to you.
Additionally, invoice factoring companies have less stringent credit requirements than banks. As factoring companies are purchasing your outstanding invoices, your clients’ credit score is more important than yours.
It is simple to see how invoice factoring can help small and medium-sized businesses sustain their operations, especially during this pandemic. In these difficult times, Accel Business Funding can provide invoice factoring service to help keep your doors open.