What is Factoring?
If your business offers 30 to 60 day terms for your accounts receivable, you need to know about factoring. Businesses of all sizes use factoring as a cash flow solution, using unpaid invoices as a way to access working capital. At JOBE Services Inc. (JSI), we offer factoring services for small to medium-sized businesses in the greater Humble and Houston, TX, region and throughout Texas.
Factoring is a type of financial management option for businesses. Essentially, we buy your unpaid invoices and collect the funds from your customers. Factoring is also called invoice factoring, accounts receivable financing or invoice financing. It is a way to improve your cash flow quickly utilizing one of your biggest assets. This is not a loan that you do not need to pay back. Your customers will pay the “invoice” when they submit payment for services or products you have provided.
How Does Factoring Work?
With factoring, you receive the money owed on your outstanding invoices immediately, versus waiting for customers to pay in the allotted time. This is not a loan. You do not need good credit, in fact you are actually using the credit worthiness of all your clients and there is not an extensive waiting period to complete the process. You simply sell your invoices to us at a discounted price, similar to being offered a cash discount for prompt payments. Except the payment is much faster, it’s the same day that your invoice or invoices are approved for purchase. You can do this as a one-time solution or as a continuing option to improve cash flow for your business.
Benefits of Factoring for Small to Medium-Sized Businesses
While companies of all sizes use factoring as a source of increased cash flow, small to medium-sized businesses are our focus at JOBE Services Inc. Our clients want to increase their cash flow without the need for bank loans or other riskier financing options. Factoring has many benefits for growing businesses, including:
- No debt or repayment of loans
- Immediate cash infusion
- No waiting for slow paying customers
- Less time and money spent on collections
- Use as often as needed
What could you do today if all your accounts receivable invoices were instantly paid? Factoring gives you a quick influx of cash when you need it to pay expenses or invest in new equipment. To learn more about factoring and how JOBE Services Inc. can help your business, contact us at our office in Humble, TX.