Sensible Reasons to Choose Freemont Factoring Companies
Factoring is a financing alternative to getting immediate cash on your business’s invoice. There are many reasons why companies opt to use factoring as a financial tool. Here are the key benefits that many Freemont factoring companies offer.
Back Office Services
Collection of payment from clients can be taxing on your business’ overhead and time. A factoring firm will take over the duties with a collection professional who will follow up with your clients until the full invoice amount is paid. Most factors provide online accounts that let you track real-time client payments. This gives you time to serve clients as you seek out other opportunities without worrying about payments.
Immediate Cash Flow
When providing services on credit, it’s common to wait up to 3 months on client payment. That might result in cash flow issues. When you use factoring solutions, you get an advance on your payment within 24 hours. This swiftly builds up cash flow, letting you add workers, purchase equipment, and cover other costs that help you operate smoothly.
Many Freemont factoring companies have access to credit information and days-to-pay details on firms that might become clients. Some factoring firms even have their rating platforms for firms in your field. This resource lets you make wise and well-calculated decisions concerning existing and new clients.
Factoring offers the flexibility and ability to help your business expand faster than it would when self-financed or backed by a loan. Setting up factoring is also easy. Rather than looking for a conventional bank loan, you can set up a factoring account within a few days. The best thing is that there are no restrictions to the amount of financing from a factor with a strong capital base.
Set Up Financing
New businesses always require funding to operate smoothly. However, without history, cash flow statement, or balance sheet, they won’t qualify for property-based or cash-flow loans. Factoring doesn’t have these prerequisites since it’s based on the credit report of the business’ clients. A factor will assess your client’s credit score, payment structure, and general financial health before giving out the funding. The duration the business has been in operation is never a major issue to the Freemont factoring companies.
Factoring is different from a loan. The funding comes as your business accumulates receivables and is settled immediately after your clients pay. With the recourse factoring, the factoring customer does assume the collection risks in case its clients fail to pay. However, many Freemont factoring companies will let you work off the amount by withholding some percentage of future advance or reserve payments.