The Basics of Advance Business Capital Factoring

Advance business capital factoring is used across a wide range of logistics industries and more. Business factoring companies provide a much-needed service that helps companies meet their needs for capital for growth and more. Learning more about how advance business capital factoring works will provide the information you need to make informed decisions.

Raising Capital

In the logistics industry there are about 12 million locomotives, trucks, vessels and rail cars are moving goods every single day. Many of the firms behind these transports depend on advance business capital factoring to meet their needs.

Business factoring services provide the immediate revenue that businesses are owed. Business invoice factoring is a financial service that provides solutions to raising capital. Let’s say company A is doing a robust business, and part of the reason they are such a popular service is because of their generous invoice terms.

Those generous invoice terms are favored by company A’s client base, however, it often puts company A in a holding pattern when it comes to collecting on the invoice. In steps a trusted advance business capital factoring company. The factoring company buys the invoices that are owed from company A so that company A can have access to the revenue generated by those invoices sooner.

Advance business capital fills in the gap between the time the service is provided and the time the money is collected. It is not a loan.

Not a Loan, It is a Sale

There is some confusion about what advance business capital factoring is. A lot of people think that business factoring services are a loan. This service is not a loan. The business is selling the invoices that are owed at a discount to raise immediate cash.

The beauty of the process is that it can be a long-term solution because you can use the process over and over, however, you do not have to commit to a long-term commitment. Instead of making monthly payments on a loan with interest, you sell the invoices and that is the end of the commitment.

This can be a win-win situation for any business that heavily relies on invoices to collect payment. You can still offer great terms to your clients without having to wait long periods to get your money.

Leave a Reply