Are your clients taking up to 60 days to pay their invoices? This is a very common situation and a significant cause of stress to many business owners. Unfortunately, having a profitable business does not necessarily mean that you have a reliable cash flow. Quite the opposite, many times a business may have great profits and a very unreliable cash flow.
How can this be? Simple. Your clients are paying you in 60 days, but you need to pay employees every week, rent and suppliers. Although the numbers may work in the long term, in the short term you are left with very little cash. This is unless you have a lot of money in the bank to cover the deficits.
But, what do you do if you are new, growing or just dont have a lot of funds in the bank? Get a business loan? Unlikely. Business loans are hard to get. A better option would be to use invoice discounting. Invoice discounting is a form of financing that is not offered by a bank its offered by a factoring company.
Invoice discounting, as it name implies, involves selling your invoices for immediate cash, at a small discount. Its value proposition is very simple. Are you willing discount between 1.5% to 6% from...
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