Cash Flow Problems? Consider Factoring
If your business is having cash-flow problems right now, then factoring may be for you! La Verne Chamber of Commerce member UC Factors offers this option – but what, exactly, is it?
Factoring is the purchase of accounts receivable (invoices) from a business extending credit for services rendered and/or product sold and delivered on terms to another business (B2B credit extension) by a third party, normally a financial institution. It is not a loan or a traditional line of credit. Additional services are covered by the factoring company that are not covered by a bank, but each factor will offer different services for their pricing, so compare wisely.
Whether you are in the service industry, the manufacturing industry, transportation industry or any other industry, you can benefit from invoice factoring! Industries that factor include:
Manufacturing (apparel, electronics, food processing, fabricated metals, printing)
wholesaling (durable goods and most non-durable goods)
Business Services (temporary staffing, oil and gas related services, IT maintenance and repair, janitorial cleaning and maintenance, commercial printing, security guard services)
Special construction (underground utility and pipeline, excavating, tower inspection and maintenance, welding)
Transportation (interstate, intrastate, hot shot, and freight brokers)
UC Factors, with an office in nearby Glendora, has an experienced staff who are well versed in a variety of industries. Not only are they experts at factoring, but they can also help you with industry-specific billing and payment procedures.
The Benefits of Factoring
The main benefit of factoring is that it is not a loan; it is an agreement to sell your invoices at a discounted rate with the factoring company assuming the credit risk for the purchased invoices (if agreement is Non-Recourse), which gives you restriction-free cash flow almost immediately. Because of this, the requirements and qualifications for invoice factoring are much different than a traditional bank loan or a line of credit.
This makes invoice factoring a beneficial choice for many businesses, especially new, small, or growing businesses or ones who may have poor credit because the criteria are based off of your customers’ ability to pay – not yours.
This cash flow will allow you to pay necessary expense related to your business immediately. Allowing you to build better credit with your suppliers and vendors and possibly better credit terms. With the security of a factoring company, you can confidently take on new business, knowing they will fund them upon completion.
It is a great way to increase your cash flow without taking out a bank loan or a line of credit. However, because you are dealing with cash, it is important to be sure the factoring company you choose is professional and reputable. Different companies are best suited to different industries and businesses, so it is crucial that you take the time to research what factoring company is right for you and your business. Not all factoring companies offer the same services and pricing, so make sure you are comparing them accurately. How to choose the right factoring company?
About UC Factors
Established in 1975, UC Factors has been factoring for the transportation industry for over 40 years. We have signed thousands of clients and funded billions. They have no voicemail during operating hours; instead, they will get a live specialist when they call and all emails are answered promptly.
UC Factors will pay $250-$1,500 for each referral they sign and fund. If you know a business that could benefit from invoice factoring, you can earn some easy cash. Any industry that has business to business receivables from credit worthy debtors with proof of service rendered/product received is factorable. UC Factors accepts new businesses! All you need to do is submit their information to us using our Referral Form. In addition to getting a check for your referral, each referral gets you an entry into the referral raffle to win prizes such as a Keurig coffee maker!