Unlimited Working Capital and No Credit Risk for Start-Ups
How Can Startup Companies Get Financing?
Over 90% of small businesses experience cash flow issues causing damage to their company and credit. Invoice Factoring with Bankers Factoring helps business owners overcome cash flow shortages. We provide non-recourse invoice factoring to our clients and consistent cash flow to keep you from becoming a distressed company.
Invoice Factoring, also known as accounts receivable factoring, is a startup company financing vehicle where businesses sell their invoice to Bankers Factoring, and we provide immediate funding. We eliminate the need to wait for 60, 90, or 120 days for payment from your customer.
Invoice factoring is when a company sells its invoices to Bankers Factoring to avoid waiting for payment. We provide immediate cash funding up to 92% of the value of your receivables by purchasing your invoices. Once your customer pays the invoice in full, we then deposit the remaining balance to the account, less our small factoring fee.
For startup companies with only one customer and extended payment terms, invoice factoring can remove the stress of how to pay your bills.
Why do Startups use Invoice Factoring?
A/R Factoring is a proven financing tool that helps businesses lacking cash flow, cash reserves, or experiencing distressed financial situations. It is also an efficient way to get quick funding by selling your receivables to Bankers Factoring.
Small businesses, startups, and entrepreneurs often acquire new customers with extended payment terms. However, this business growth causes cash flow issues. These slow-paying customers cause problems for business owners juggling payroll, inventory purchases, and overhead expenses. So how do you make bi-weekly payroll when your only account has 60 or 90-day terms?
The answer is invoice factoring with Bankers Factoring. We remove the burden of collecting receivables from your customer and waiting for payment.
How do I qualify for A/R Factoring?
Qualifying for Factoring is entirely different from traditional financing or bank lending. For example, we do not assess the business owner’s credit; instead, we evaluate the creditworthiness of your customer (account debtor). Thus, this is an excellent benefit for startups because not all business owners have established great financial strength or credit.
We look at your customers’ credibility since they pay the receivables we purchase from your company.
When qualifying for Factoring, there are three main criteria for approval:
- Invoices or receivables for completed work to a business-to-business (B2B) or business-to-government entity (B2G)
- Documentation for proof of organization and identity
- No liens against your receivables
If you want to learn more about the requirements for qualifying, then please visit our previous article, 8 Requirements to Qualify for Invoice Factoring.
How does Accounts Receivable Factoring work?
The process of Invoice Factoring with Bankers Factoring is focused on providing quick and efficient working capital. Factoring is an excellent solution for business owners stressing over meeting payroll or paying bills for your B2B or B2G customer contracts.
To start the factoring process, your business must have delivered goods or completed services to your customers. Since they are paying the invoices, your customers are called the account debtor.
- Work is completed, or goods are delivered, and our client generates an official invoice
- Send Bankers Factoring the invoices and request funding
- Bankers Factoring approves your funding request
- The client receives an initial cash advance up to 93% within 24 hours of approval
- Bankers Factoring receives payment in full from the accounts debtor
- Bankers Factoring deposits the remaining invoice balance, less our factoring fee to your checking account
Not only does Bankers Factoring help business owners overcome their cash flow struggles, but we also take on the credit risk. Startup companies have many troubles when launching. We help ensure consistent cash flow for your operations and growth with our startup financing.
Non-Recourse Startup Factoring
Without or non-recourse means that Bankers Factoring takes the credit risk in our factoring agreement. Our credit risk or bad debt protection includes the risk of bankruptcy, insolvency, or protracted slow pay by the account debtor.
For example, if your business struggled to meet payroll and factored $100,000 worth of invoices to Bankers Factoring, your customer (account debtor) declared bankruptcy. Our bad debt protection would cover these losses. Imagine being a business owner struggling to meet payroll; then your customer declared bankruptcy.
We remove the burden, stress, and risk for startups, entrepreneurs, and small businesses for managing your cash flow and credit risk.
What industries can use Factoring?
One of the advantages of A/R factoring is the flexibility it provides across virtually any industry. Many common industries for Factoring include:
- Trucking and Transportation
- Staffing and Recruiting
- Wholesalers and Distributors
- Wine and Spirits
- Oil and Gas
Benefits of Small Business Invoice Factoring
Bankers Factoring helps small businesses not rely on banks or traditional lending, which are difficult for startups to obtain. Invoice factoring is a fast and easy way for small businesses and business owners to overcome cash flow gaps and grow their businesses. Since Bankers Factoring evaluates the creditworthiness of the account debtor, the business owner’s credit is not part of the underwriting process.
Have banks turned you down due to your credit history? With invoice factoring, lousy credit is acceptable because approval is based on your customers’ credit. Small business factoring provides instant cash with more flexibility and zero debt to repay.
Do your customers pay on 30, 45, 60+ day terms? Could your small business benefit from getting paid faster? Invoice factoring helps you receive your money quicker.
Benefits of Small Business AR Factoring with Bankers Factoring
Bankers Factoring is the leading factor for small businesses, startups, and entrepreneurs. As an employee-owned company, we understand the importance of cash flow to your operations and growth. We eliminate the need for business owners to manage their receivables process with our non-recourse factoring service.
Our start-up factoring programs include:
- Credit risk management
- AR management
- Increased factoring lines as your business grow
- No hidden fees
- Tier rates for startups
- Consistent cash flow
- 24/7 online reporting
- Same day funding
- Up to 93% cash advance
With our total A/R management, our clients no longer worry about collecting payments. Business owners and managers focus on strategic issues while we handle your back-office accounts receivable management.
Startups and small businesses benefit from our tiered rate structure, which rewards your business growth. We help close your close flow gaps; in turn, you have funding to market and sell your products and services.
Your small business or startup can reach new markets and develop new products through invoice factoring. Allocating your cash flow to operations and growth is critical for entrepreneurs. We work to provide the working capital you require to acquire new customers. Get financing for your startup company today with Bankers Factoring.