Back to Basics: What You Need to Know About Factoring
Does your business bank account balance rise and fall like the tide? Keeping cash flow steady is a challenge, especially for small to mid-size companies. Slow paying customers, seasonal fluctuations, unexpected expenses, on-time payrolls and many other elements can impact your cash flow. Invoice factoring can be the solution you need to create a steady, stable cash flow. Here is what you need to know about accounts receivable factoring and how it can help your business.
What Is Factoring?
Simply put, factoring is selling your invoices or accounts receivable. If you have customers that have net 30 terms or even 60-day terms, you are providing product and services first, then waiting to be paid in the future. Invoice factoring is a financing option to get paid now for invoices you generate each day or week from a factoring company; the factoring company then will process and collect the money from your customer.
Types of Factoring
There are two main types of invoice factoring: recourse and non-recourse. With recourse factoring, you remain partly liable for the invoices you factor. If your customer does not pay the invoice for any reason, you pay back the full amount of the factored invoice to the factoring company. Non-recourse factoring is a no Credit Risk option since you sell invoices and the factoring company assumes all the Credit Risk associated with approved Debtors. Therefore, utilizing the Credit Worthiness of your customers to expand your business. JOBE Services Inc. is a non-recourse factoring company, a good choice for small to mid-size businesses.
Benefits of Invoice Factoring
The obvious benefit of factoring is receiving payment quickly for outstanding invoices. Our business clients can choose which invoices they factor, how often and how they receive their payment. This keeps cash flow stable and available for expenses, large purchases or growth opportunities. If you use invoice factoring through JOBE Services Inc., some of the specific benefits we offer include:
- Management of your accounts receivable
- Online access via desktop – mobile devices
- Easy invoice submission
- Same day funding with check, bank wire transfer, fuel card or ACH deposit
- Excellent customer service for you and your customers
- No application, processing or hidden fees
If you are interested in learning how invoice factoring could help your business in the Houston area or anywhere in Texas, contact our team at JOBE Services Inc. We have been locally-owned and operated in Humble, TX, since 1996. Call us for innovative cash flow solutions with factoring for your business.