Learning About Factoring Invoices in a Non-Recourse Manner
Posted onIf a business owner is looking for additional working capital, non-recourse factoring may be a viable solution. In non-recourse factoring, the factor buys a company’s invoices at approximately 96%, and they are responsible for collecting on those invoices. Once the invoice is paid, the customer receives the remainder minus the factoring fee. Below is a quick look at some of the biggest benefits about factoring.
Protection From Bad Debt
In non-recourse factoring, business owners are protected if a client doesn’t pay the invoice. Lessening liability is a big advantage for business owners, especially those who are just starting out and who aren’t yet on firm financial ground.
Improved Cash Flow
As most owners know, cash flow is a company’s lifeblood. It helps businesses operate smoothly, support workers, buy equipment and purchase inventory. If a business is in a slow period or if clients delay paying invoices, insufficient cash flow can put the company in jeopardy. Non-recourse factoring is a quick and simple process that gives businesses the money needed to operate smoothly.
Financing Growth
With a factor, business owners don’t have to wait for clients to pay them. Rather than getting a loan and accruing debt, business owners can turn to a factor to get the money needed for expansion. Whether an owner wants to hire additional workers, move to a bigger building or buy expensive equipment, consistent financing can help them reach their growth goals.
Eliminating Debt
If a company is in debt, non-recourse factoring can help the …