Invoice financing--also called invoice funding or invoice loans-- allows a business owner to obtain a sum of money by using their unpaid invoices as collateral. Oftentimes, it can take 30, 60, or 90 days to collect payment on an invoice. This can greatly hinder a business that needs immediate working capital.
With invoice loans, you, the business owner, can obtain capital quickly through an advance from an invoice lending provider. This type of asset based loan lets you use the cash for business expenses now as you wait to pay off the loan as the invoices get settled over the next 30-90 days. Usually, the invoice finance provider will give you between 75-80% of the total amount of the invoice(s) to use for your business’ needs.
Invoice financing opens up a world of opportunities for businesses that rely heavily on invoicing to obtain cash flow.
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Why would you choose invoice financing over other options? Here are a few of the most valuable points:.
It’s no secret that small business owners need an alternative to traditional loans. They need more flexibility and less risk to continue expanding, which is exactly what invoice financing is good for.
Getting invoice loans is not a complicated process. Follow these 5 steps to get it started:
Working CapitalTransportation Company
Merchant Cash AdvanceBar Restaurant
Line of CreditPPE Wholesale
In general, invoice financing companies will look to work with business owners that have accounts receivable of $50k and up. That doesn't mean that there aren't exceptions. Providers may work with businesses that have a lower amount, it all depends on each unique scenario.
If you have bad credit, that is not a problem as invoice finance services are looking at the creditworthiness of the customer who needs to pay the invoice rather than the business owner.
Figuring out how to get a small business loan and set yourself up for success is what we’re here to help you with. Don’t hesitate to reach out to us today for more information.
Connect with our capital partners on invoice financing options & receive a quick quote in a matter of minutes.