You finish a project for your customer. You send the invoice. Now you wait 30, 60, maybe 90 days for payment. But your bills don't wait. Payroll is due. Suppliers need payment. Your rent is due. Accounts receivable factoring turns those unpaid invoices into cash you can use today.
Understanding the Gap
You complete work and send an invoice. Your customer will pay, but their terms mean you wait. Meanwhile, your expenses keep coming. This gap between finishing work and getting paid puts pressure on your cash flow.
How Invoice Factoring Works
AR factoring works differently than bank loans. Banks look at your credit score and want collateral. Factoring companies look at your invoices and your customers' creditworthiness. You get funding in 3 to 5 business days.
You submit your B2B invoices. The factoring company advances 85% to 90% of the invoice amount. They collect payment from your customer. When your customer pays, you get the remaining balance minus a fee.
When Factoring Makes Sense
Asset based financing through invoice factoring works well in certain situations:
- Your company is growing and needs more working capital to keep up
- You experience seasonal changes in revenue
- You received a large order that requires money upfront to fulfill
- Your customers regularly take 60 to 90 days to pay
At EPOCH Financial Group, Inc., we provide financing for B2B companies in many industries. We work with staffing agencies, transportation companies, manufacturers, technology firms, construction businesses, and healthcare providers. Our financing ranges from $1 million to over $50 million. We structure each arrangement based on your specific business situation.
What You Get
Accounts receivable factoring does more than provide cash. The factoring company collects payments from your customers. Your team focuses on business operations instead of chasing invoices. You get steady cash flow when customers pay slowly. This financing doesn't show as debt on your books.
Costs range from 0.75% to 1.50% of your invoice value. The rate depends on your invoice volume, customer credit quality, and industry.
Choosing the Right Solution
Every business is different. When evaluating financial solutions for business, invoice factoring works when you have customers with good credit who take time to pay. It may not fit if your customers pay quickly or if you serve individual consumers.
At EPOCH Financial Group, Inc., we handle collections, review customer credit, and manage paperwork. This lets you focus on your business. We adjust our services as your company grows.
Next Steps
Think about your current situation. Do you have B2B customers who pay in 30 days or more? Do you need cash now to cover expenses or take advantage of business opportunities? Does waiting for customer payments limit what you can do?
If you answered yes to these questions, accounts receivable factoring may help your business. Contact us at EPOCH Financial Group, Inc. to talk about your needs. We can explain how factoring works for your specific situation and help you decide if it's the right solution for your company.
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