Invoice Factoring

You need money to pay your workers or material next week and you have maxed out your line of credit. If your banks would not lend you more money, you should consider invoice factoring. Invoice Factoring is the sale of account receivables to a "factor" for immediate cash advance. Factoring of invoices allows you to collect the money you are owed immediately by accepting a small discounted amount of the invoice. A form of factoring that everyone is familiar with is the credit card transactions. Every time you pay by credit card the shop owner receives a slightly reduced amount (1-2%) because they have to pay the credit card companies a fee in exchange for immediate access to the cash. 

Invoice factoring offers many advantages to business:

• Factoring can quickly provide fund to meet the needs of an expanding business. Businesses that have not had a long operating track record or sufficient hard asset would have a difficulty time qualifying for a loan.
• Factoring improves cash flow, providing working capital to pay bills and buy needed inventory or raw material.
• Factoring relies on the strength of the business's customers, rather than the business itself. Therefore factoring can be a source of start-up capital for businesses that do not have history.
• Factoring is flexible. A business is not required to factor invoices from all of its customers, only enough invoices to cover the money it needs.

At Momentum Capital Solutions we offer non-recourse factoring. It means once the factor purchases the invoices from you, the factor takes on the risk of non-payment in the event of bankruptcy by your clients. Give us a call or fill out a form online so that we can help you to get the cash your business needs. Unfortunately at this time we can only factor invoices of businesses within the United States. Due to the differences in laws, international factoring has been problematic in our experience.

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