Invoice funding is similar to invoice factoring as both methods rely on accounts receivable to provide businesses with capital. However, when a company chooses to use an invoice factoring company, they retain their invoices, along with the responsibility to collect them. The invoice funding company, American Prudential Capital, will provide a certain percent of the value of the accounts receivable invoices which the business must repay within an agreed upon period of time.
Retaining ownership of the invoice can be advantageous to the business owner as the customer is unaware the business received invoice funding from an invoice factoring company. Invoice factoring is more like a cash advance against the value of the businesses accounts receivable invoices and must be paid back whether they are paid or not. This means that if the customer fails to pay the business, the invoice funding received from an invoice factoring company, like APC, must be paid with alternative capital.
Although there is some risk involved for the company, it isn’t much more risk than obtaining a loan using traditional funding sources such as a bank or credit company. Invoice factoring is quite popular among establishments of all sizes but is especially popular among proprietors that haven’t built a credit-history or sufficient collateral. Invoice factoring from a company like APC, is a great alternative funding source, providing them with a reliable solution to the sort of temporary cash flow issues organizations and startups often experience.
Invoice factoring companies, such as APC, readily provide alternative funding to businesses whose accounts receivable invoices bill with repayment dates from between 30 to 90 days. Invoice factoring is the perfect solution for those that are not well established and unable to obtain loans from traditional sources. By accessing the cash tied up in accounts receivable, they are able to keep their business flowing with enough cash-on-hand to make a difference and keep the doors open.
Invoice factoring companies, like APC, also help service businesses achieve the yearly growth needed to keep them in the game. Each time a company repays the invoice financing capital, the funding company then increases the amount of cash flow available for invoice factoring. This means they are able to build an expanding source or readily available cash for them to access. One of the most important aspects of owning a business is their ability to grow and without a ready source of fast cash, this may not occur. Obtaining alternative financing using invoice factoring allows them to purchase equipment, payroll, hire new employees, stock much-needed inventory, and to continue to grow.
As a small company grows, the invoice factoring company, APC, grows and increases the businesses access to invoice funding as the business shows their creditworthiness by paying back the funding fast and in full. Eventually, this creditworthiness will be recognized by traditional funding sources, allowing them to access funding through traditional loans. But APC will stand by every business for as long as needed, providing easy access to cash-flow through invoice factoring, a fantastic alternative finance funding solution.
One of the of the advantages of invoice factoring is that it allows the business to maintain complete control over their invoices, supplying as few or as many as they like to obtain financing. Invoice factoring companies, including APC, will never ask for a business to provide purchase orders from their accounts receivable that they aren’t wishing to use. The company remains in control of all invoices, supplying the purchase orders they chose to have funded. Small business owners are able to decide which invoices they wish to have funded and will never be pressured to offer more or present invoices that add up to a certain cash amount.
Every company stays in complete control of their invoices. Not only does each business owner stay in control, the account receivables presented for invoice factoring to the invoice funding company can garner cash flow in as little as 24 hours. Proprietors are able to present the ones that will best provide the assistance needed to keep cash flow healthy, shelves stocked, payroll met, taxes and fees paid, utilities paid, equipment purchased and anything else the business needs to achieve growth. Invoice factoring companies like APC are only interested in how they can be of service to startups and small firms in Houston. Keeping them open and growing is their main concern and they are dedicated to providing alternative funding solutions to achieve just that.
Selecting Invoice Funding Services Versus Invoice Factoring Services
Invoice factoring allows company owners to retain full control over their financial systems, unlike invoice factoring which requires proprietors to sell their accounts receivables to the invoice factoring company. By keeping control of the business, customers will never know that the business has received alternative invoice financing from an invoice factoring company.
Surprisingly, invoice factoring companies report that invoice financing is not only great for small business but is the preferred financing method for a number of larger corporations as well.
Invoice financing provides funding that grows as the small business grows, allowing more funding to be accessed with each new invoice financing experience. Being able to increase working capital required and essentially build creditworthiness. Invoice factoring allows small firms to continue growing and operating without missing a beat.
Invoice factoring services may be the best option for financial staff that oversees rigorous credit control procedures that may prohibit borrowing from traditional funding sources.
Both invoice funding and invoice factoring services help proprietors receive the funds as they need them, often within 24 hours of approval. Both alternative funding methods allow proprietors to select the account receivables they wish to use and how much financing is desired. Each business simply selects the invoices and the cash amount needed. These then become collateral, staying in hand when opting for invoice factoring services and getting transferred to the invoice funding company when invoice factoring is selected.
Whether invoice funding or invoice factoring is selected as the alternative funding source, the creditworthiness is not factored into the financial arrangement. Invoice funding providers, such as APC, provide working capital without regards to credit, or lack thereof. However, invoice funding does consider the repayment history of past invoice funding transactions in order to upgrade the invoice financing amounts. As the business continues to repay promptly, the amount available for invoice financing increases.
Determining if invoice factoring service is the best option: Contact an APC finance advisor today to learn more.
To learn more about how invoice factoring assists small organizations and startups, just call the finance experts at APC today to speak with a trusted finance advisor. As one of the highest ranked invoice funding companies, APC has years of experience in finding alternative financial funding solutions for proprietors in Houston.
A cornerstone invoice factoring company, APC proudly serves small business pioneers, ensuring the backbone of America has the support and working capital required to continue to grow and expand. Call APC today and discover all the alternative funding solutions available for small business and startups of industries like a freight or a trucking company, even healthcare, and healthcare products providers.
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- Acquisition Funding
- Growth Funding
- Invoice Factoring
- Purchase Order Financing
- Small Business Startup Funding
- Working Capital Financing