Are There Any Drawbacks of Invoice Factoring Financing?

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Presentation Description

Invoice factoring financing is considered to be one of the easiest and most cost-effective short-term funding option. When businesses are looking for constant cash flows, they rely on factoring their invoices since timely payments are not always a reality.

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Presentation Transcript

Slide 2:

Invoice factoring financing is considered to be one of the easiest and most cost-effective short-term funding option. When businesses are looking for constant cash flows, they rely on factoring their invoices since timely payments are not always a reality. Business owners who utilize this method of cash funding often speak about how it is their best friend when the need of urgent cash settlement arises. However, startups and entrepreneurs who are new to the market and have little know how about this method of financing do not have a similar impression.

Slide 3:

Hence, there is always a doubt regarding its drawbacks.   This is common! Unless you are fully aware of something, the first impression might not be positive always. In invoice factoring, there is a small fee charged to the business owner, which is generally a percentage of the total invoice amount.

Slide 4:

This figure can range anywhere between 1-5%, depending on the type of factoring agency, sales agreement, and sales volume. Also, the business owner does not have to pay a penny when they factor their invoices. Business owner receives total invoice amount minus factoring fees. The invoice will be a property of the lender thereafter who will consult the client on the day it is meant to be paid. Hence, the service provider holds no liability whatsoever towards the client or the money lender. Compared to loans and other business funding mediums, invoices and its processes in no way can be considered a drawback. Also, there are companies who charge even lesser - as low as 2 percent - of the total invoice amount.

Slide 5:

In short, accounts receivables factoring seldom has any drawback. With zero legwork and a small price to pay, you receive a great service along with cash in hand. The right company will factor your invoice in a day or two. Also, there are no further risks involved, which is quite common in case of other business funding methods. Read more www.invoicefactoringus.com

Slide 6:

Today, industries like transportation, textile, staffing agencies, manufacturing unit, government contractors, SMEs and many others are taking full advantage of this factoring method. If you are new to business and there is a stress of cash-flow, no option is better than factoring your invoices. Liabilities are the last thing you would like to deal with in a new venture and invoice factoring is the only financing method where it doesn’t exist at all.

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