Late invoices make everything in your business grind to a screeching halt. It doesn’t matter how much you prepare: you simply can’t pay for bills with money you don’t have.
There’s always the option of taking out a loan, but you have enough to worry about already, right? This is where accounts receivable financing rates come into play. Designed as a way to get you your money on time, factoring services are becoming the new norm. Even better, learning how to choose a factoring service is incredibly simple. It all boils down to what you need to do to make your small business succeed.
Have you encountered one late payment too many? It’s time to put your foot down and look for solutions. Read below on the function of accounts receivable financing rates and how they can help.
Let’s define the average American work environment first. Small businesses are outlined as any business with fewer than 500 employees, accounting for 99% of all businesses in the United States. There are 30 million to the country’s name and counting, which only makes the need for effective invoicing all the greater. Just one late payment can cause a spiral that affects everyone up and down the ladder, customers included. Likewise, receiving your money on time will open doors you previously didn’t think possible.
Did you know nearly 60% of invoices are paid late? This is no mere exaggeration. It’s estimated that, if all invoices were paid on time, American small businesses could effectively hire two million more employees. This is thanks to all the time — and therefore money — saved by regular payment schedules. When you’re weary of chasing after payments and need a break, factoring business receivables can fill in the gap.
Starting a small business is difficult enough without adding late payments to the mix. According to the Wells Fargo Small Business Index, $10,000 is the average amount of startup capital required — this means a small business owner with even less has more hurdles to jump through just to get to that first sale. Even worse, a U.S. Bank study found 80% of businesses that fail do so because of cash flow problems. This is before other common issues like marketing budgets and employee turnover. Where does it end?
When you look up accounts receivable financing rates, you look up a solution to a very old and frustrating problem. Invoice factoring is a form of accounts receivable financing that converts outstanding invoices due within 90 days. It’s a reliable method that cuts through the slog of calling and pestering for payments. Not only that, but it saves all your employees the issue of having to make up for lost time. When it comes to invoice factoring services, everyone wins.
Cementing invoice factoring solutions takes a few simple steps. The first is figuring out your business credit score — unlike a personal credit score, which ranges from 300 to 850, a business score is between 0 and 100. It takes around 48 hours to get your first funding set up and processed. When it comes to the needs of your business, timely payments really are everything. Save yourself the trouble in 2019 and beyond by reaching out to a factoring service.
Late payments shouldn’t be the end of your business’s potential. Learn about your business credit options by asking invoice factoring companies where to get started.