3 Ways Factoring Trumps a Small Business Loan
Maintaining a steady cash flow for your small business can be tough. When you serve other businesses and invoice for your services on 30-day, 60-day or even 90-day terms, what do you do when you need cash before the invoices get paid?
A Common Cash Shortfall Problem
This is a common problem faced by smaller service-oriented businesses. For example, you provide services to another business and invoice them for $10,000. The invoice terms are for 30 days. But you just had to pay up front for the materials needed to perform this project, leaving you low on cash – and payroll is due by this Friday.
A short-term business loan requires you to pass a credit check, put up some form of collateral and jump through all sorts of hoops. Factoring allows you to get cash from that invoice now, minus a small fee, so you can use the money when you need it. The factoring company collects your payment from your creditor under the terms of the invoice as agreed.
3 Reasons to Choose Factoring Over a Loan
How is factoring better than a small-business loan? Here are three good reasons:
- No Credit Check – With factoring, there is no credit check. We depend on the creditworthiness of your creditor to pay their debt.
- No Collateral – Factoring requires no collateral because it is not a loan. The guarantee you put up is the invoice for services already rendered to your client.
- No Risk – Non-recourse factoring means our company assumes the risk if your creditor does not pay the invoice. You owe nothing but the factoring fee.
JOBE Services, Inc. based in Humble, Texas, has been in the factoring business for a long time, so we know how to do it right. There are no hidden fees, no long-term contracts and no funny business. Just a simple way to assist small businesses like yours.
Contact JOBE Services, Inc. today and learn more about how we help companies maintain a steady cash flow with reputable and legal non-recourse factoring in Texas.