If you’re a small business that sells products or services to other businesses, you’ve probably struggled with waiting for a customer to pay an invoice. If you’re fortunate, the wait may be just for a few days. But sometimes, it’s 30, 60, 90 or more days. Not only is it frustrating, but it can have a real impact on the success of your business. You’ve done the work or sold the product, but now, you have to wait a while to record that revenue.
Long payment cycles can make it difficult to deal with every day or emergency funding needs. Some customers, such as big corporations or government agencies, even demand generous payment terms or are simply slow payers.
For B2B businesses, or businesses that sell products or services to other businesses or organizations, there’s a smart financing option to help you deal with extended payment cycles: invoice factoring. Invoice factoring allows you to turn invoices into working capital. Instead of waiting 30, 60, 90 days or longer, you’re able to get a cash advance on an unpaid invoice, allowing you to use the funds for a pressing business need. Here’s the best part: you’re accessing funds that you’ve already earned and not incurring any debt.