Money You Can Count On

One benefit of factoring that is seldom mentioned is that factoring offers dependable money.

What I mean when I say “dependable money” is that factoring allows a business owner to know exactly when payment will come in.

Even with the most creditworthy, dependable customers, payment on a particular invoice typically has about a week of ‘wiggle room’ in actually receiving payment. It could come a few days early, it could come a few days late, and there is no way to know exactly when payment will come.  With customers that are less dependable, organized or prompt, this could turn into a few weeks or months of ‘wiggle room.’

Businesses should be prepared for this to some degree; it’s the nature of 30 day payment terms, but there are situations where the money needs to be there. Starting a new project, making payroll, loan payments, due taxes, rent, expanding business; the list goes on, but the point is that in all these situations the business needs to have the money in-hand and ready to go. This is easy when the business has plenty of cash but when money gets tight, fulfilling obligations can get stressful. Rather than hoping to get paid in time to meet payroll or rent, factoring can provide the assurance that money will be there when it is needed.