Factoring – turning your outstanding invoices into instant cash — puts many businesses firmly on the road to success. This age-old process of paying companies in advance for completed work speeds up a company’s cash flow and brings other benefits. Today, wholesale distributors in particular choose factoring for a variety of reasons.
Accelerated Cash Flow
When it’s time to cover inventory, payroll, warehouse leases, shipping costs, and other critical expenses, many wholesale distributors face a cash flow crunch. Their customers take 30 to 90 days to pay for the goods that they received, but the distributor has to have cash on hand to pay for fixed expenses. Some distributors try to fill that temporary financial shortfall by borrowing from high-interest marketplace loan companies, but going into debt puts many businesses in serious jeopardy.
A growing number of wholesalers choose factoring as a more affordable cash flow solution. Factoring gets their accounts receivable in sync with their accounts payable and eliminates that risky cash flow gap – without incurring debt.
Quick and Easy Approval Process
Wholesale distributors with an urgent need for funds or with previous financial challenges often choose working with factoring companies rather than banks because of the speed and ease of getting funds. The approval process for factoring can take as few as 24 hours after documents are submitted while bank loans can take weeks. In addition, applicants who couldn’t qualify for bank loans based on their assets, credit scores or past bankruptcies can easily be approved by a factoring company. Factoring professionals evaluate wholesale distributors based on the creditworthiness of their customers, not the distributor’s own credit history.
Professional Collection Services
Factoring companies invariably have teams of experienced collections professionals who will handle the entire process of collecting outstanding payments for their clients. Wholesale distributors can rest assured of personalized follow-up for all their factored invoices.
Find out why successful wholesale distributors choose Interstate Capital as their factoring partner. Get an instant factoring rate quote today.