What are the benefits of factoring for your industry

Before you use factoring services, we recommend starting with a financial analysis of your business and weighing the following:

• the costs of factoring, namely the fixed fee based on the invoice amount;
• the time left until the due date;
• the costs of waiting for payment, including the opportunities you could miss.

This will help you decide whether factoring is worth it.

What are the main benefits of factoring?

The most obvious advantage is fast access to cash.

On instantfactoring.com, you can create a new account and submit your financing application online in just a few minutes. In no more than two hours, our financial analysts will review and approve your application, and within 24 hours you can withdraw the money. The difference between 24 hours and 30, 60, or even 90 days can have a huge impact on your business. When payments are putting pressure on you, you need money instantly, not in a few months.

Think about how many opportunities can come up while you're waiting for customers to pay. How do you fund new orders? With access to cash, you'll be able to take on new orders and sign new contracts with a lot more confidence.

You save time. It's much faster to access factoring services online than to go to the bank and have to gather all kinds of balance sheets, contracts, and other documents. A few clicks and the money is in your account. No extra trips and no useless paperwork. You can keep focusing on the things that really matter in your business.

Many people don't think about it, but factoring can improve your relationships with suppliers and customers. Suppliers will appreciate being paid on time, which makes it easier for you to get discounts or other benefits. Customers will be glad they're no longer under pressure to pay as quickly as possible. They'll see that you're a serious business they can trust, one that can get financing without hassle.

It protects your business in a crisis. Think about how many businesses shut down during a crisis because they didn't have access to cash and couldn't pay employee salaries, suppliers, taxes, and all their other expenses. With stable cash flow, you can negotiate better terms for your customers and keep them close. You can stay calm because you have access to cash for any unexpected situation. That way, your business can hold on until things return to normal.

Which industries benefit most from factoring services?

Transport & warehousing is one of the industries where the average collection period for receivables (DSO) is generally high, at 85 days in 2018 (according to a KeysFin study). In this situation, it's very important for transport companies to have access to cash so they can keep operating, even with activity already reduced by the crisis, and:

• pay suppliers;
• pay salaries for drivers and other employees;
• pay taxes, loans, or leases on time.

Demand has been rising this year for construction companies, and the cost of the materials and resources needed to launch new projects is usually high. Factoring services can help construction companies secure the steady cash flow they need to take on new orders. They help with:

• taking on new orders and benefiting from rising demand;
• covering the high cost of materials and the resources required;
• paying employee salaries.

The problem in manufacturing, retail, and distribution is that there's usually a gap between paying suppliers and getting paid by customers, which can hold your business back. If your business operates in one of these industries, factoring services can help you:

• offer longer payment terms of up to 90 days;
• bridge the gap between paying suppliers and getting paid by customers;
• buy inventory and raw materials for new orders.

Service businesses rely mainly on labor, so the main challenge is paying salaries. Service companies can use the cash they get through factoring to:

• pay employee salaries, utilities, and other operating expenses;
• win new customers and new orders;

If you're dealing with any of the situations above, or you simply feel factoring could help, contact us at 0786.090.382 or by email at contact@instantfactoring.com, and let's find the right solutions for your business.