The Advantages of Factoring for Manufacturing
If you are tired of dealing with cash flow problems every time that you handle large invoices, it could be time to think about investing in a robust factoring agreement. This service is suitable for all kinds of manufacturing sectors.
Whether you handle food, beverages, alcohol, tobacco, textiles, chemicals, machinery, or electronics, factoring for manufacturing can help you to gain fast access to your money. By allowing a factoring agent or firm to buy your invoices, you can save yourself some time and precious resources.
Why Choose These Services?
Account receivables factoring can be especially useful for small businesses and manufacturing companies that are used to operating within quite tight profit margins. As all established businesses know, making sales is not necessarily the same as profiting from them. This takes time, because payments take time to process.
It can take around 20-30 days (sometimes longer) for a customer to complete a payment transaction to a supplier, so the invoicing process is slow and cumbersome. This can create serious cash flow problems for a business.
If capital is tied up in inventory,it can be difficult to pay employees or provide financial support for essential growth and expansion ventures. It is good news then that factoring for manufacturing does not actually involve the borrowing of capital.
The money that is advanced belongs to you, for the provision of goods and services. The only difference where factoring is involved is that the money is handled through a ‘middle man,’ in order to accelerate its progress through invoicing channels.
The Criteria for Factoring Services
There are no complicated requirements needed to set up a factoring arrangement. However, both your own business and the invoiced business need to be reasonably stable and credit worthy. This is an important risk management measure and it benefits your company too.
In most cases, if the invoiced business does not pay the full amount owed, the vendor can be held liable for the money lost by the factoring company. This is why you should only set up this kind of arrangement with a reasonably trustworthy customer or client.
However, if it later becomes clear that the client cannot pay the money owed, negotiations may be held to determine whether the lead business can be still be held liable.
Factoring with Capital Funding Solutions
You will quickly realize that the best factoring for manufacturing companies are the ones that are willing to discuss the possibility of flexible terms. As all industries have distinct requirements, they all need a tailored approach. With support from the right factoring agent, you can securely hand over the responsibility for invoicing to a trusted third party.
To find out how Capital Funding Solutions can take the weight of invoicing and delayed transactions off your mind, speak to our expert team today. We can provide recommendations from clients across Florida, Texas, New York, Georgia, Michigan, Virginia, and a wealth of other locations.
Factoring For Manufacturing in Florida, Texas, New York, Georgia, Michigan, Virginia…