It is a new month, and the start of a new week. July 1, 2019, in fact, is a day when many people are looking at the summer and making plans for what they still want to accomplish. For business owners, however, July 1 can be an ominous date. If you are the owner of a small gift boutique or a hair salon, for instance, you might be looking at sluggish sales at exactly the time when you need to be paying for orders that you want for your shelves by Christmas. Always a challenge, there are often many times when small and large business owners alike find themselves struggling to find the capitol they need to pay for items that will not be even put out on the shelves for another four months.
Fortunately, there are many options that are available. And while some businesses look at traditional loan options for their companies, others find that they have more success with capital credit factoring and financing options.
What Is a Factoring Company?
Advance business capital factoring companies offer a creative financing options for many. From the trucking factoring companies that help world wide shipping companies deal with the challenges they face to the business factoring services that focus on small business owners, there are many advantages to having a flexible and short term loan option.
In answer to the question what is a factoring company, one of the best answers came from a Wall Street Journal article:
“The factor advances most of the invoice amount, usually 70% to 90%, after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction, or factoring, fee.” Providing just the amount of money that is needed for an upcoming payment to a large supplier, for instance, these factoring services are exactly the resource that many businesses need.
There are nearly 28 million small businesses in America, and many of them know the financial challenges that today’s economy presents. In fact, bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. Fortunately, some companies are able to avoid bankruptcy and smaller financial challenges when they take advantage of the services provided by factoring companies.