How Does Your Small Business Bridge the Gap Between Invoices Due and Invoices Paid?

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Few businesses can function without the immediate and timely payments that are owed from their creditor. Unfortunately, few creditors can survive if they pay all, or any, of their bills in advance. This uneasy balance between businesses and creditors is one that can leave businesses scrambling to meet their own bills and expenses while they wait for the money that is owed them.

Faced with the difficult challenges of paying their own creditors, businesses often must find a way to bridge the gap. Sometimes relying on lines of credit, other times taking out short term, but regular loans, many businesses continue to look for the best options. For some businesses, invoice factoring is the solution. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for a small business. Sometimes used by medium or large businesses, international factoring services provide a reliable way for companies to get the funds that they need when they are needed, but quickly pay them back as soon as possible.
Commercial Factoring Companies Provide a Way for Large Businesses to Meet Its Responsibilities

From freight factoring companies to invoice factoring services, there are many resources in place that can help companies pay for the services they provide while they are waiting for customers to make payments. Interestingly enough, the larger a company is the greater its need may be when it comes to international factoring services.

For instance, if a trucking company only has 10 drivers who need to be paid for the time and expenses it requires to deliver the loads that they deliver, that company only needs the average salary, benefits, and expenses times 10. A much larger trucking company, in comparison, that has 1000 drivers on the road at any one time needs the average salary, benefits, and expenses times 1000. And while the payments from the customers will be greater for the larger company, the expenses in the meantime are greater as well.
Factoring companies can help small businesses bridge invoice payment gaps with upfront payments as much as 90% of the original invoice. Likewise, these same factoring companies can help small businesses avoid waiting 60, 90, or even 180 days for customer payments. Unfortunately, U.S. bankruptcies increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. If you want to have the financial cushion that you need, perhaps it is time to work with a factoring service so that you can meet your financial obligations while you await customer payments. Larger companies might need to explore how international factoring services can help.

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