Invoice Factoring Companies for Small Business
How to Choose a Small Business Factoring Company
An Award-Winning Small Business Factoring Company
Why Bankers Factoring is the Best Invoice Factoring Company for Small Business
Small Business Payroll Funding through A/R Financing
Factoring for Small Business Summary
Small business invoice factoring, or A/R factoring, is a commercial funding solution when a small business sells its good but open invoices to an invoice factoring company. It is a simple solution that allows business owners to fight through slow-paying customers and create sustainable cash flow. It also includes credit checks on your customers at a cost below most credit cards. You can grow your business with small business invoice factoring even if you are turned down for multiple small business loans.
Is invoice financing a good idea? Yes, if you have B2B or B2G selling terms of net 20 to 90 days and can’t afford to wait for your money, invoice discounting is a great option. You receive 80-93% on the day you invoice and the balance when your customer pays the invoice less the factoring fee from factoring companies.
A Small Business Invoice factoring Company versus a Bank Line of Credit
You can also read about the difference between invoice factoring and a bank line of credit for small business owners weighing the difference between the two types of invoice financing- factor invoices versus a bank line of credit. What is the difference between invoice financing and factoring? Factoring for small businesses is selling your invoices on a non-recourse basis to Bankers Factoring, while invoice financing is having a borrowing base where you can get funding against eligible receivables. Non-recourse factoring offers a security service because of the credit protection that business loans or lines of credit do not.
A small business factoring company turns outstanding invoices and safe and fast working capital to capture your growth opportunities. Unlike other factoring companies, you will like how small business factoring works at Bankers Factoring with an easy factoring application process, minimal qualification requirements, and a low factor rate. We also fast apply customer payments into your factoring account unlike many other recourse factoring companies.
Table of contents
- Invoice Factoring Companies for Small Business
- How to Choose a Small Business Factoring Company
- An Award-Winning Small Business Factoring Company
- Why Bankers Factoring is the Best Invoice Factoring Company for Small Business
- Small Business Payroll Funding through A/R Financing
- A Small Business Invoice factoring Company versus a Bank Line of Credit
- How can I finance my small business without creating balance sheet debt with the right factoring companies?
- Small Business Factoring
- What is small business invoice factoring?
- How does small business invoice factoring work with a factoring company?
- Improve Small Business Cash Flow with Invoice Funding for Small Businesses
- Here are some of the ways small business invoice funding helps improve cash flow:
- How does small business invoice funding work?
- What are the advantages of invoice factoring for small business?
- Small Business Factoring Example
- How to qualify for small business funding?
- What costs does a small business incur when selling invoices?
- Bankers Factoring is a Small Business Factoring Company
- Small Business Invoice Factoring gives you the following:
- Bankers Factoring as Your Small Business Factoring Company
- Ready for the owner-employees of Bankers Factoring to fund your Small Company safely? Use our fast online factoring application or call the toll-free number 866-598-4295
Small business factor financing for the not-yet bankable small businesses struggling with cash flow.
How can I finance my small business without creating balance sheet debt with the right factoring companies?
A recent Alignable survey found that 47% of small and medium-sized businesses are at risk of closing this fall. Furthermore, the factors driving cash flow problems for small businesses stem from extreme economic circumstances. With record inflation, consumer and producer prices are going up. With rising US interest rates, getting typical loan financing is not as attractive.
Small businesses rely on steady cash flow to pay their employees and vendors and to produce sales. However, the cash flow struggles for startups and small businesses widen with each period business owners go without startup funding. Bankers invoice factoring service for small businesses can give you same-day funding with a high advance rate versus waiting 30-90 days for invoices to pay.
Invoice financing turns your accounts receivable into same-day working capital. Non recourse invoice financing also gives the credit risk of non-collection of your accounts receivable to Bankers Factoring. But small business factoring can help them keep their operations active by selling unpaid accounts receivables for working capital. Moreover, invoice factoring is a simple solution that allows business owners to fight through recessions and create regular cash flow based on your client’s payment history, not yours.
If you are a startup software company we have factoring programs for you with immediate cash flow and the security service of credit-protected invoices from one of the few dedicated small factoring companies.
Small Business Factoring
Small businesses extend 30, 60, and 90-day credit terms to commercial customers to close business. However, these payment terms strain the small business’s weekly and bi-weekly payables. Small business invoice funding injects cash into startups by turning unpaid invoices into same-day working capital.
Small businesses are different from major corporations, with strong balance sheets, cash reserves, and resources. In addition, startups and small businesses are family-owned or have a couple of members. So, it is inevitable for small businesses to need cash flow factoring and invoice financing from their choices in invoice factoring companies.
Bankers Factoring specializes in small business funding. So, complete an online funding application to begin the funding process. Our owner-employee team helped small businesses navigate uncertain economic environments through COVID and the 2008 market crash.
Learn more in our previous article Startup AR Financing to grow your business via accounts receivable financing. Turn customer invoices into same-day working capital via one of the few award-winning invoice financing companies.
What is small business invoice factoring?
Small business invoice factoring services, or AR funding, is a commercial funding facility created when a small business sells its invoices. Further, by selling unpaid AR invoices, the small business receives immediate working capital to finance its business. Additionally, small business invoice funding also provides cash flow without taking on debt or giving up equity in your startup.
Small business factoring differs from SBA Loans or commercial financing. Invoice funding is designed to benefit the not-yet bankable or financially distressed business owner. As such, any type of business can receive funding solutions that SBA loans cannot. When reviewing the pros and cons of invoice financing, the credit risk of invoice financing without credit insurance is a large negative. Invoice financing and invoice factoring are similar with credit protection being the largest difference.
How does small business invoice factoring work with a factoring company?
Small business funding is a relatively simple process. In addition, we can provide same-day funding with a completed application and required paperwork. Conversely, traditional debt financing usually takes months for funding. However, with small business factoring, your business can receive funding this week.
Small business factoring has a few requirements to begin the funding process:
- Unpaid invoices to a creditworthy commercial business or government entity
- No liens against your A/R or business assets – unencumbered invoices
- No significant legal or tax issues
- Completed funding application and required documentation
Once our potential clients submit their applications and paperwork, the funding process is swift for either accounts receivable financing or invoice factoring.
Small business factoring follows the same steps as traditional invoice factoring:
- Small business or startup sells a batch of open invoices to Bankers Factoring after your customer’s credit check.
- Bankers Factoring approves the small business factoring application.
- Bankers Factoring deposits up to 93% of the total invoice balance the same day as approval.
- Bankers Factoring rebates the remaining AR balance less our factoring fee once the account debtor pays the invoice.
Learn more in our previous article, “Startup Funding with Factor Finance.”
Improve Small Business Cash Flow with Invoice Funding for Small Businesses
Cash flow struggles from offering credit terms to your customers can ruin your business finances. Accordingly, if your business buys and sells goods, it needs to buy merchandise before it can be sold. Additionally, long operating cycles, with lengthy days sales outstanding (DSO) will cause your payables to outpace your A/R.
By selling your invoices, you are securing a reliable source of funding for your small company at the best funding speeds.
Here are some of the ways small business invoice funding helps improve cash flow:
- Eliminate the wait of NET 30 or NET 60 billing terms
- Sell your invoices and have the free cash flow to cover payroll each week
- Factoring versus turned down for business loans
- Working capital to buy more inventory
- Low factoring fees with an easy-to-understand factoring contract
- Website portal to see you open invoices and payments
- Acquire more customers by offering credit terms and avoid the stress of financing
- Payroll financing source for weekly or bi-weekly periods
Accordingly, selling unpaid invoices is a funding option to accelerate cash and financial operations for your startup or small business. Even better, with one of the best factoring companies to meet your business capital needs.
How does small business invoice funding work?
Small business owners and entrepreneurs rely on personal credit and savings to bootstrap operations. Consequently, cash flow struggles are constant when building your business; eventually, you need funding sources. As such, selling unpaid invoices provides entrepreneurs with a low-risk cash-flow financing solution.
The process of small business financing through Bankers Factoring is client-focused, enabling you to complete our application online. Furthermore, underwriting standards in traditional financing do not allow much room for startups or small businesses. Additionally, you can leverage creditworthy customers to obtain funding by selling your invoices.
We inject a working line of credit into your business within 3 to 5 days of your funding application. In addition, we cash advance (advance rates) 80 to 93% of your total accounts receivable (A/R) value upon funding approval. Furthermore, invoice funding is a fast process geared toward small companies.
What are the advantages of invoice factoring for small business?
Small business factoring provides a quick financing process for companies in a cash flow crunch. In addition, fast funding depends on your customer’s (account debtor) credit and benefits the not-yet bankable small business. Invoice funding also helps enterprises regain control of their finances and business performance.
- Quick funding: we provide same day AR factor financing to small businesses. Small business factoring funds are used for weekly payable runs.
- Payroll funding: small businesses waiting two months for payments lack the cash reserves to pay employees on time. Small business factoring provides payroll funding to support growth and current operations. Learn more in our previous article, “Small Business Payroll Funding.”
- No debt financing on the balance sheet: small business factoring provides a cash flow facility without balance sheet debt. Small businesses lacking financial strength cannot afford the new debt.
- Competitive rates start at .95%: small business funding rates start at .95% per 30 days. Invoice factoring makes sense for startups compared to costly Merchant Cash Advances (MCAs) or high-interest debt.
- Funding solution with unlimited access to working capital: small business factoring is a cash flow vehicle that grows with your business. When startups grow their monthly receivables, their access to monthly funding increases with improved rates.
Small Business Factoring Example
A small business called Company ABC provides goods and services to a commercial customer (the account debtor). Each month, Company ABC invoices at least $50,000 for delivered goods. Also, Company ABC extends NET 30 payment terms.
The small business completes the invoice funding application with Bankers Factoring to quickly turn outstanding invoices into now cash flow. Don’t wait 30 to 90 days for customers to pay.
Bankers Factoring conducts the invoice factoring due diligence process. The small business factoring agreement includes the following terms:
|Initial Cash Advance (90%)
|Factoring Fee (per 30 days)
Company ABC can expect two cash disbursements assuming the account debtor pays on time. First is the initial cash advance of $45,000, which is a 90% advance of the total AR value. The second and final funding is the rebate or discount, which is the remaining balance, less the 1.50% fee. In this example, the rebate is $4,250; Company ABC received $49,250 in total cash funding throughout this transaction.
How to qualify for small business funding?
Funding your startup company with unpaid invoices is a fast way to secure working capital. As such, the requirements for factoring are different from traditional bank lending. Accordingly, you can finance your invoices based on your customer’s credit. Comparatively, having strict debt-to-income and credit score standards, Bankers Factoring funds small businesses based on your accounts receivable (A/R) credit quality.
As such, small business owners with bad credit can obtain working capital funding by selling unpaid A/R. Furthermore, your company can develop its balance sheet and credit quality by free cash flow from invoice funding.
What costs does a small business incur when selling invoices?
The discount rate is the main cost when selling your unpaid invoices. Additionally, the discount rate is also called the factoring fee or rebate. Industry standards are between 1% to 5% for invoice funding services. Accordingly, your factoring rates depend on a couple of main factors:
To qualify for invoice factoring and to receive a fast-funding quote:
- Your customer’s credit history
- The risk associated with your business and industry
- The concentration of your invoices or how many customer’s unpaid invoices you are selling
- Your projected annual revenue
- Time in business doesn’t matter to Bankers Factoring. It is easy to qualify for invoice financing.
All fee schedules are included in your factoring agreement. We pride ourselves on our invoice factoring services with no hidden fees or charges so you can know your true invoice factoring cost.
Bankers Factoring is a Small Business Factoring Company
Bankers Factoring Small Business Factoring helps startups fight pressures with cash flow funding. Additionally, with Bankers Factoring, our Startup Non-Recourse AR Factoring service protects our clients against risks. We provide AR Insurance to cover our clients from customer bankruptcy, insolvency, and slow pay.
We provide a protected cash flow solution to small business owners with access to unlimited working capital. Accordingly, if your business has resorted to costly Merchant Cash Advances (MCAs), we are here to save you with non-recourse factoring financing options, unlike many recourse invoice factoring companies. Don’t let a small business loan turndown ruin your business.
Small Business Invoice Factoring gives you the following:
- Access to Unlimited Working Capital for a b2b business.
- We worry about your customers when they pay their invoices.
- Fast Application Process with a proposal in 24 to 48 hours.
- Credit scores, due diligence, and background checks on your potential customers.
- Up to 93% of Total A/R Balance Cash Advance Rate against Invoice Amount.
- Outstanding invoices become a thing of the past.
- How much does invoice financing cost? Invoice Factoring Rates of .95-1.60%
- Time in business and annual revenue are not a factor.
- High advance rate to invoice amount with low factor fees.
- Small monthly minimum fees to maximize your accounts receivable.
- Small business loans turndown specialists. Other lenders send us their turndowns.
- Factoring is both a short term and long term solution.
- A/R Insurance with Credit Checks and Bankers responsible for collecting.
- Cash Flow and Invoice Payments Management.
- The safest business financing with daily wires into your business bank account.
- Outsourced A/R Management with Bankers non recourse factoring.
- Selective Factoring versus Spot Factoring Company.
- Same Day Funding with more a availability than a typical small business loan amount.
- Small Business Payroll Funding
Bankers Factoring as Your Small Business Factoring Company
As an employee-owned company, Bankers understands your needs and has tailored an invoice factoring program for small businesses just for you. We have been named one of the best invoice factoring companies in the entire United States for two years in a row because of our dedication to the small business community and our low factoring fees. As voted one of the best factoring companies, we hope you choose us as your invoice factoring company to fix your unpaid invoice cash flow issues. Apply for invoice financing from Bankers today and use invoice factoring on your terms from one of the few award-winning small business factoring companies.
Invoice factoring for small businesses is fast and easy at Bankers Factoring Company and based on your customer’s credit score, not yours.