What is Invoice Factoring?

Posted by Gil Oliva on Wed, Jul 09, 2014 @ 08:07 AM

Invoice factoring is a form of working capital financing for businesses. The simple process provides quick and efficient accounts receivable financing. Rather than waiting for invoices to be paid tomorrow, a factor will purchase them today, giving you instant access to your working capital. 

This useful form of financing is clearly explained on the Bay View Funding website, and in our blog many times, in many different ways, but now we have added a fun and informative video and short process guide just to make the message as clear as possible. 

The collateral is designed to help the many different types of businesses clearly understand the value of accounts receivable financing. Despite the fact that there are a growing number of alternative forms of financing, invoice factoring continues to be the perfect answer to meeting working capital needs if you have a healthy number of accounts receivables waiting to be paid. 

In the short video, David is searching for an answer to help effectively finance the operating costs of his business. He is unable to secure a loan or bank line of credit since his company has not been in business for very long, and has not established the sort of strong credit history that is vital when applying through the bank. He is responsible for the working capital requirements of a small business with a strong customer base and plenty of active accounts receivables. Many of his customers take 60-90 days to pay their invoices but David needs to make sure all his operational expenses are covered. The video explains how Invoice factoring is an effective way for companies to access working capital today for invoices due to be paid in the future, and therefore cover operational expenses and grow. It also emphasizes that it is the creditworthiness of customers, and their ability to pay invoices that is essential, rather than the creditworthiness of the company applying for factoring.

The concise process guide helps clarify how invoice factoring works, from initial contact with an invoice factoring company, basic information required to qualify for an offer, to beginning to factor and receiving funding in as little as 24 hours. It also details the added benefits available when you factor with Bay View Funding, such as an in-house credit department, the ability to choose which invoices to factor, and that you are not locked in to any long-term contracts. 

While the invoice factoring process may seem obvious to many, there are still companies who have not yet realized the potential benefits of this type of financing. “At Bay View Funding, each member of our dedicated team promises to genuinely, and personally provide you with the best factoring solution to meet the unique and specific needs of your company.” – Glen Shu, CEO.

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Topics: Financing Government Contractors, About Invoice Factoring

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