Are you a furniture company owner? If so, you might be familiar with the struggles of having to make your expenses from month to month when your invoices go unpaid. The sad fact is that many new companies never get out of this cycle and end up going under when an unexpected expense comes up. The good news, though, is that you can get access to the cash you need right away with invoice factoring for furniture companies. This arrangement allows you to increase your operating income without having to go into debt or opening a new line of credit.
About Invoice Factoring
Invoice factoring works by giving you the opportunity to sell your outstanding invoices to a factoring company. The factoring company pays you most of the invoice value in one lump sum in a few business days. Then you can use the funds for necessary expenses, repairs, or advertising for new business. Once your customers pay off the invoices to the factoring company they will send you the rest of the invoice amount after deducting their fee for the arrangement.
Why Factoring is a Good Idea for Furniture Companies
Invoice factoring offers many benefits for furniture companies. For one thing, the factoring company assumes responsibility for collecting on the invoices which means that you won't have to worry about fulfilling the normal accounts receivable duties of resubmitting invoices and making collection calls. Another benefit of invoice factoring is that you can get the cash within just a few days. If you took out a bank loan and got approved you might have to wait weeks or months for the loan to close before you could get the funds.
As mentioned earlier, a major advantage of factoring is that you don't need any credit to qualify for it. The reliability of your customers' payment history is what qualifies you for a factoring agreement. Still another benefit is the low cost of getting a factoring plan established. Most factoring companies only charge a fee of a few percentage points which makes this a far less expensive option than taking a cash advance on your company credit card.
Thanks to its many benefits, invoice factoring can be a great short-term cash solution for furniture companies. If you decide to use this option you'll be able to get quick cash to use for your business, even if your customers don't pay on time.