Invoice factoring is one of the best forms of funding for all businesses – from small to midsize companies and even startups. As a small business owner, not only is factoring the company’s receivables easier than obtaining traditional loans but it also doesn’t create debt for the business. Despite the benefits of Business Factors, less than 10% of small businesses apply for them. A considerable proportion of small businesses opt for traditional loans and lines of credit. This article explores different businesses and industries that can benefit from invoice factoring.
The transportation industry
Whether a transportation unit is equipped with small fleets or medium ones, both entities have similar challenges. They wait for the shippers to pay them while trying to meet payroll, cover fuel charges themselves, manage upkeep, and grab the next load.
Although both small and medium transportation businesses are competing in the same space as larger companies, they don’t have access to financial benefits similar to those enjoyed by larger transportation entities. Therefore, they can’t afford to wait for payment and prefer turning to transportation Business Factors service providers to bridge the gap.
The healthcare industry
The healthcare industry also faces similar issues. Often, healthcare professionals wind up battling with insurance companies over unpaid claims, and even when they do pay, payment needs to be made promptly. While larger healthcare firms can afford to wait for their payments, smaller practices can’t.
When the entities can’t purchase equipment or supplies, reverse healthcare factoring can come to the rescue. In these cases, the invoice factoring company pays the suppliers on behalf of the healthcare practices.
The manufacturing industry
Now that the manufacturing industry is highly competitive, it isn’t uncommon for a manufacturing company to offer flexible payment terms to their clients in exchange for securing larger orders. But at the same time, this entity needs to pay a large staff, cover overhead costs, and purchase materials and equipment. Companies prefer turning to manufacturing factoring to improve their cash flow and continue to attract customers.
The oil and gas industry
When it comes to the oil and gas industry, most people think of multinational corporations, but the reality is that these mega-corporations are often served by smaller companies. Securing a lucrative contract with multinational energy corporations sounds great, but these large corporations have a lengthy invoice approval process and also require multiple signatures before paying any cash.
It is with oilfield services factoring that small companies can get paid right away and continue their operations without worrying if their invoice is still cycling through the accounts payable process of large corporations.
If the B2B company of an individual is struggling due to slow-paying customers and cash flow issues, then turning to Business Factors can come in handy. Invoice factoring is a no-debt cash slow solution that helps businesses turn their account receivables into cash within the shortest possible time. All a company needs to do is sell its outstanding invoices to an invoice factoring company at lower rates. Selling unpaid invoices to a third party (factor) will enable a company to receive a percentage of the invoice’s value as immediate cash.