What is Invoice Factoring?
Invoice factoring is a powerful financial tool that can change how businesses manage their cash flow. It’s a service where businesses sell their outstanding invoices to a factoring company, turning their pending payments into immediate cash. Instead of waiting for your clients to pay, you can maintain a steady cash flow by selling your invoices to a factoring company.
The Mechanics of Invoice Factoring
- Provide a Service or Product: Your business delivers a service or a product to a client and generates an invoice.
- Invoice Your Client: You issue the invoice to your client, setting payment terms as usual.
- Sell the Invoice: Instead of waiting for the payment, you sell that invoice to a factoring company like First Union Lending.
- Get Paid Upfront: The factoring company pays you a significant percentage of the invoice value upfront. This injects an immediate cash flow into your business.
- Debt Collection: The factoring company then takes over the debt collection. They work to get the payment from your client.
- Receive the Remaining Balance: Once the factoring company has collected the debt from your client, they pay you the remaining balance minus their fee.
The Benefits of Invoice Factoring
The beauty of invoice factoring lies in its simplicity and its immediate impact. It provides:
- Immediate Cash Flow: No more waiting for payments. Get a significant percentage of your invoice value upfront.
- Less Time Chasing Payments: Let the factoring company handle the debt collection. Free up your time and resources.
- Focus on Growth: With a steady cash flow and less time spent on collections, you can focus on what truly matters – growing your business.
Reach Out to First Union Lending Today
If you’re interested in leveraging the power of invoice factoring, don’t hesitate to call First Union Lending today. We’re here to help propel your business toward success.