Factoring for B2B Start-Ups
Table of contents
- Factoring for B2B Start-Ups
- How to Finance a Startup Business with Invoice Factoring
- Financing Options for B2B Startups
- A look at Accounts Receivable Factoring Costs, Terms & Qualifications
- Accounts Receivable Factoring Costs
- Accounts Receivable Factoring Terms
- Accounts Receivable Factoring Qualifications
- Who is Accounts Receivable Factoring Right For?
- How Startups Obtain A/R Factoring
- Advantages of A/R or Invoice Factoring
- The Start-Up Factoring Bottom Line
- Ready for the owner-employees of Bankers Factoring to fund and grow your B2B startup? Call 866-598-4295 or go to Bankers-Factoring-Application.
How to Finance a Startup Business with Invoice Factoring
Small business owners building startup companies have a business to run but often miss new sales because they have no funding. Entrepreneurs invest their life savings into their businesses and hit roadblocks once those funds are gone. We understand the sleepless nights of covering payroll, but Bankers Factorings removes the burden of cash flow issues.
Financing Options for B2B Startups
Accounts receivable (A/R) factoring is a tool business uses to address short-term cash flow gaps by selling unpaid invoices. A/R factoring, also known as invoice factoring, costs as little as 1% of the invoice value for each period the invoice is outstanding. Moreover, the funding amounts can vary from $10,000 to $9,000,000. Thus, Bankers Factoring removes the hassle of A/R management and bad debt protection for our clients.
Bankers Factoring also offers a quick and easy approval process for startups that need financing quickly. In fact, we provide same-day funding to entrepreneurs, startups, and small businesses when they need it most.
A look at Accounts Receivable Factoring Costs, Terms & Qualifications
Startup business owners who struggle to manage their cash flow benefit from consistent cash flow by factoring. For startup companies, it is challenging to pay overhead, cover payroll, and make sure your personal bills are paid. But AR Factoring helps small businesses remove cash flow obstacles and accelerate their business growth.
Visit our Frequently Asked A/R Factoring Questions (FAQ) to learn more.
Accounts Receivable Factoring Costs
AR Factoring costs include:
- Starting factoring rate from 0.95-2.9%
- No APR fees
- No Origination fees
- No hidden fees
Accounts Receivable Factoring Terms
A/R factoring terms include:
- Factoring amount: $10,000 to $9 million
- Advance rate: Up to 92% of the invoice value
- Rebate: the second cash disbursement paying the remaining invoice value less factoring fees
- Payment Terms: the period and conditions the account debtor has to pay the invoice
- Speed of funding: Same day as approval
- Account Debtor: This is the term for our client’s customers. They are the party responsible for paying the invoice.
- Non-recourse factoring: Bankers Factoring offers credit protection to our clients through non-recourse factoring. We take on the risk if the account debtor does not pay the invoices.
Startup companies with large commercial customers can overcome the 90-day payment gap by selling their invoices to Bankers Factoring. Entrepreneurs needing funding to acquire another commercial account use their cash advances for new sales, inventory, and payroll.
Additionally, our tiered factoring structure rewards startups for growing their business as businesses increase their monthly receivables, their access to factoring lines increases.
Accounts Receivable Factoring Qualifications
A/R factoring qualifications include:
- A completed factoring application
- An accounts receivable aging report
- Invoice quality: Creditworthy business (B2B) or government (B2G) customers
- Paperwork: Invoices, driver’s license, voided business check, and bank statements
The creditworthiness of the invoices is what matters for factoring qualifications. In fact, our approval does not consider our client’s credit, only your customer’s.
Who is Accounts Receivable Factoring Right For?
AR Factoring also helps startups secure funding and reliable cash flow solutions with no established credit or financials. Entrepreneurs and small business owners often struggle with cash flow management. For instance, your industry might be seasonal in nature, and your only customer has an average days sales outstanding (DSO) of 100 days.
- Startups that invoice commercial customers: Factoring is more accessible than securing traditional financing, such as bank loans. If your customers are slow paying, then A/R factoring can be a quick solution.
- Companies with extended payment terms: Customers with 60, 90, and 120-day repayment terms make it hard for startups to cover monthly expenses. Thus, factoring resolves this cash gap to meet payroll and take on new sales.
- Independent contractors who bill clients for large projects: long projects require contractors to cover expenses until the project is complete or a customer pays the invoice.
- Business owners with low credit scores: Invoice factoring relies on the creditworthiness of our client’s customers.
How Startups Obtain A/R Factoring
AR factoring enables startup companies to expand their customer base. It only requires a few steps to complete the factoring transaction.
- Create an invoice for work completed or delivered to your commercial client
- Submit a Bankers Factoring Funding Application
- Receive a cash advance of up to 93% of the invoice value
- The account debtor makes the payment for an invoice
- Bankers Factoring issues the rebate, paying the remaining invoice value
Advantages of A/R or Invoice Factoring
Startup companies lack the working capital to fund their business operations. AR Factoring allows entrepreneurs to fund operations and invest in their business growth. Consistent cash flow is critical for startup companies with limited reserves.
Bankers Factoring is ready to provide quick funding for startups with the following:
- Quick funding process
- Easy application process
- Unlimited access to capital
- Provides payroll funding
- No hidden fees
- We take on the credit risk
- Outsourced A/R Management
- It does not require strong credit history
The Start-Up Factoring Bottom Line
Accounts receivable factoring is a convenient way for startup business owners to access capital locked up in unpaid invoices. Non-recourse A/R factoring eliminates the cash gap from customers with extended terms. For quick funding and cash flow solutions, factoring generates consistent cash flow in your business. Expand your business with Start-Up A/R Financing today.