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How Invoice Factoring Helps Startups

Posted by Seth Herman on Thu, Jun 22, 2017 @ 10:01 AM

Invoice factoring may provide the funds your startup needs to help get it off the ground.Startups can be some of the most innovative business ventures. Being innovative can also involve a lot of risk, and many startups suffer from time constraints, staffing to meet demands, and difficulty obtaining funding. Invoice factoring may be able to help with funding by optimizing cash flow without the long delay that generally follows the invoicing process. Using invoice factoring may help ensure that your startup won’t run out of funds, which could potentially halt operations and slow growth.

What is Invoice Factoring?

Invoice factoring can be an effective way to manage your business finances. This practice allows you to submit your unpaid invoices to an invoice factoring service or company for cash. Your startup can receive funds from the factoring company in as little as 24 hours in some cases. This process allows you to make the most of your working capital without having to wait for payments that can take upwards of 30 to 90 days.

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Advantages for Startups

Some startups don’t have the luxury of using conventional sources of financing. While trying to secure venture capital or a loan are popular options, it can be challenging to obtain them before demonstrating to a financial institution that your business possesses a profitable operating history. Invoice factoring is an alternative to traditional financing that can help speed up the payment process, which can provide continued growth and stability for your startup.

Starting up an invoice factoring account is simple. You will not be asked to provide tax returns, financial statements, or business projections. Unlike applying for a loan through a traditional bank, the factoring company will be most interested in the credit and quality of business of your potential customers.

This can offer significant advantages for startups like improving cash flow: with invoice factoring, you won’t have to wait the full 30-90 days that typically follow an invoice. The goal of any good invoice factoring company is to provide your business with the funds you need quickly while maintaining an excellent working relationship with you and your customers.

Why You Should Start Invoice Factoring Today

With every startup business, time is money. Waiting for investment companies to agree to give you funding, or for a bank to approve a loan, is time-consuming and can slow down or halt production altogether. Factoring can be more efficient, less restrictive, and will allow you to make decisions to grow your business more quickly. Contact Bay View Funding today to learn how our services can get your startup going with invoice factoring.

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Topics: About Invoice Factoring, Start up funding

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