When we examine invoice factoring, also known as invoice finance, we’ll see how Paragon Business Capital Funding can assist your company in growing. Factoring firms offer a different way to get the money you need to grow your business. Whether you have a bad credit history, have been in business for a long time, or are tired of dealing with traditional finance methods, invoice factoring can help with the quick cash flow.
If your Trucking/Transportation Company has delivered several loads and has too many Invoices to be paid to your company by the Shippers or Brokers then you know how difficult it can be to live on the edge of whether or not your customer will pay. These payments are necessary for day-to-day operations, and when invoices start piling up, your cash flow situation gets murky. This is where invoice factoring can truly help your company get the funds most needed to keep your company run effectively and efficiently on the way to the growth of your company for a better future.
You can use invoice factoring to secure a loan from a factoring company by pledging invoices as collateral. You can get cash flow quickly for around 85 percent of the total invoice amount. What about the 15 percent that’s left? Factoring firms, on the other hand, keep this sum in reserve. You’ll get a fraction of it back, and the remainder will be subject to factoring and processing fees.
When all is said and done, these costs are little more than a “convenience fee.” If you require cash quickly and have outstanding invoices, invoice factoring is a viable option. Invoice factoring providers buy your invoices and pay you a percentage of the money back in exchange for a small charge.
The Invoice Factoring Process:
- Send your company Invoice to the Shippers OR the Brokers as usual with the Proof of Delivery. Also send the invoice to your client with the payment terms and conditions for the service you have provided.
- Apply to sell your invoices to a factoring company. Once the requirements are met, you sign an agreement and move forward.
- The factoring company will pay you about 85% of the total invoice amount. We will also make the client aware of the new invoice recipient that would be the factoring company. Once the invoices are done, your client will pay the factoring Company.
- Afterwards, the factoring company will then pay you what’s in reserve after all the factoring fees and costs have been deducted.