7 Reasons to Choose Invoice Financing to Fund Your Small Business
by Caitlyn Rose on December 23, 2015

Read in 2 minutes


While it’s vital that you allow customers to pay their invoices over a period of time, the reality is that you’d prefer to have that cash on hand as soon as possible.

As the owner of a small business, you will probably face this kind of catch-22 at some point. After all, timely customer payments are what you use to pay employees, make needed improvements, and buy inventory.

These days, obtaining a loan from a traditional bank is getting increasingly difficult for small businesses like yours. Instead of tapping into your own personal funds, asking friends or family, look no further than invoice financing loans as a realistic way to get the fast cash you need. Instead of letting overdue customer invoices gather dust, sell them to a lender and get money in a matter of days.

Below are 7 reasons to choose invoice financing:

No New Debt

Unlike other loan types, invoice factoring is not technically a loan. Instead, you are merely gaining access to your own money a little faster– plus additional charges for the privilege of using the invoice financing service. Since you’re not taking on new debt, this option will keep your balance sheet clean.

Better Control of Your Cash Flow

With an invoice financing loan, you can declare your independence from the tyranny of customer invoices. You now have access to a reliable influx of income, making it possible to spend these funds on the various things you need in order to run your business.

Fees Are Lower

Compared to traditional term loans, merchant cash advance loans, or lines of credit, the fees you pay with invoice financing tend to be much lower. As an entrepreneur for whom every penny counts, this is an important distinction.

Invoice Financing Grows With Your Business

As your accounts receivable blossom, so does your working capital. Best of all, there are no fixed lines of credit, and you only need to qualify once.

Increased Working Capital

With additional working capital comes flexibility and freedom. No longer burdened by worries of where the cash will come from to expand your products and services, you can take your business to new heights that could catapult you to the next level of success. Furthermore, you will now have the wherewithal to offer more generous payment terms to your loyal customers, a sure way to encourage increased sales from them in the future.

Free Up Your Time

When you take out an invoice financing loan, you are required to pay some additional costs called factors. These fees cover the lender’s costs involved in obtaining customer payments, running credit checks and chasing down late invoices. Now that you’re spared the aggravation associated with these tasks, you can use that time to grow your enterprise.

Better Control Over Your Invoices

With this type of arrangement, you can choose whether to finance some or all of your invoices; it’s up to you. This way, you can continue to manage the invoices of customers who pay on time, leaving your invoice financing company to deal with the less reliable clients.

Wouldn’t it be wonderful to be able to provide training to your current employees and hire new ones? Imagine the liberation of making your payroll without stress every time! Finally, you can take advantage of exciting opportunities that arise and have the capacity to purchase the inventory you need. All of this is possible once you harness the power of your own accounts receivable with an invoice financing loan.

Top Articles

How a Merchant Cash Advance Works

Caitlyn Rose / June 20, 2016

An In-Depth Look at How Invoice Financing Works

Ronis Gracie / November 30, 2015
Featured Posts

Minority Business Loans – Discover 36 Opportunities Here

by Taylor Gordon on May 15, 2017
You may be searching for minority business loans because you have an idea for a great new business. Or perhaps… Read more

Small Business Loans for Women – Compare 38 Options in One Place

by Rebecca Hosley on May 15, 2017
When it comes to small business loans for women, knowledge is power. Women are not new to entrepreneurship, but they… Read more

Business Owners: 5 Truths Your Banker Doesn’t Want You Knowing

by Jackie Lam on May 10, 2017
When looking for the best banks for small business loans, Bank of America and Wells Fargo may come to mind. However,… Read more

Small Business Loans for Veterans – A Definitive Guide to VA Business Loans

by Eric Goldschein on April 7, 2017
Small business loans for veterans are available through various channels and are also often supplemented with business development tools. Business… Read more

Trump Pick Linda McMahon Has HUGE Plans for the SBA

by Eric Goldschein on February 17, 2017
Linda McMahon, Donald Trump’s pick to head the Small Business Administration, isn’t exactly synonymous with the word “small.” Along with… Read more

A Complete Declassified List of Tax-Exempt Fringe Benefits

by Amy Fontinelle on January 30, 2017
With all the uncertainty surrounding Trump's tax plan, tax saving tips for small business owners are as important as ever. Finding… Read more

6 Bad Habits to Break for Gigantic Business Growth in 2017

by Lauren Ward on January 24, 2017
As an entrepreneur or small business owner, the New Year is the perfect time to take a step back and… Read more

9 Cloud-Based Tools to Solve All Your Small Business Accounting Needs

by Caitlyn Rose on September 19, 2015
 As a hard-working entrepreneur, you should already know how important it is to keep a careful watch over every penny coming… Read more

SBA Loans: The Ultimate Guide to Government Lending

by Amy Fontinelle on February 7, 2017
Small business loans through the SBA fall under several categories and while they all have slightly different requirements, there's a few universal… Read more

An Epic Guide to Business Credit Cards, Charge Cards, & Lines of Credit

by Eric Goldschein on February 2, 2017
If you’re a small business owner, you know how important it is to always have extra capital on hand so you… Read more

The Trump Presidency & Your Small Business – What You Need To Know

by Eric Goldschein on January 19, 2017
As Donald Trump takes office, small business owners everywhere are wondering what to expect from the 45th president. While Trump’s small… Read more

5 Advertising Tools to Help Your Small Business Grow

by Ronis Gracie on September 11, 2016
If you would like your small business to flourish and grow, you need to offer unique products or services that… Read more
Learn More