Majority of the startups and small business owners offer generous credit policies to attract and grow their client base. Though this is a proven technique to build client base but is this always a winning strategy? Not so much!
Did you know that 25 percent of the startups fail within the first year and 44 percent in their initial 3 years? It’s because they don’t have adequate working capital to stay successful, and pay off their debts and meet their ongoing expenses.
Every business, regardless of its size or industry, requires steady flow of cash or working capital to meet the ongoing business expenses and invest in new opportunities that have the potential to foster business growth. However, slow paying clients that have bought goods/services on credit can derail your business success as you may not always have the working capital that you may need at that point and time. This is where factoring, an emerging funding solution, can be beneficial.
Factoring helps you meet your urgent cash flow needs in a timely manner without adding to your liability. It converts invoices into a factor, that too, at a discount. This is done in exchange for cash. Factoring is one of the best ways for businesses, especially startups and small business owners, to fund new opportunities and take businesses to greater heights.
Here are some of the many ways factoring can help boost your small business:
- Factoring provides you with instant capital which you can use for expansion and business growth. You don’t have to wait for months before you receive payments for account receivables from clients. Factoring enables you to grow your business without any restriction or limitation.
- Invoice factoring helps business owners ensure consistent working capital which is much needed to improve your business credit rating. Good credit rating is crucial as it increases the company’s credibility. This helps build trust based and long term working relationships with clients. A good credit rating also shows that a company is financially strong. This enables businesses to attract both customers and investors alike. If you have a good credit score, investors will be more willing to invest in your company. And when you have more investors, your company will eventually grow and prosper.
- This method of funding can help you cover payrolls and keep the employees satisfied. Remember, employees will only work with dedication if they are paid on time. Delays in payrolls can lower their motivation to work and increase your employee turnover. They may end up switching jobs if they are not paid timely.
Other ways in which you can ensure business continuity and prosperity with factoring include the following:
- With consistent cash flows, you can combat seasonal sales
- Pay-off outstanding debts and eliminate bankruptcies
- Meet tax obligations
- Support day to day operations with stable cash flows
- Improve your purchasing power
If you’re thinking of availing this business funding method, then get in touch with us today! At CFC, we offer:
- Same day factoring application approval
- Up to 90 percent advance rates
- 1 percent per invoice factoring rate
- Assign a dedicated accounting manager
- Funding within 3 business days
With us, you can apply online and we’ll answer your cash flow needs within 24 hours. CFC is a premier online factoring service provider. We have BBB A+ rating and have helped hundreds of thousands of entrepreneurs on the road to business success. Allow us to help you too. Apply now and get ready to take your business to the next level.