Most businesses need short-term working capital at some point in their operations. To effectively manage working capital forecasts and increase business productivity, businesses can adopt Invoice Factoring as a form of managing extended payment terms and freeing up cash locked into outstanding invoices.

Factoring is another resource for short-term working capital financing. Once you have filled an order, a factoring company buys your account receivable and then handles the collection. This type of financing is more expensive than conventional bank financing but is often used by new businesses.

Here are 5 key points of how selling invoices may benefit your business:

1. Get instant working capital for your business:

Every business knows that without cash it’s impossible to run your operating cycle. Most businesses cannot finance the operating cycle (accounts receivable days + inventory days) with accounts payable financing alone. Consequently, working capital financing is needed. Instant working capital gives you cash to cover operating costs and fund large/future inventory orders.

2. Free up time and focus on growth

Not having to worry about a lack of cash flow means that you can spend more time working on core business activities and frees up time to plan growth!

3. Save money on fees compared to bank loans

Banks charge annual fees even when you are not using the service, fees for listing new customers, in addition to these fees there are interest and service fees. With a factoring company, there are no set-up or hidden fees. Depending on your factoring provider, fees are transparent and you know exactly what you are paying for.

4. No long term commitment

Depending on your factoring provider, you won’t be forced to commit to a fixed-term contract, you can pick and choose when and which invoices you wish to finance on a flexible basis that suits your requirements.

5. It’s faster than traditional loans

Banks can be slow and restrictive to borrowers. Signing up for invoice finance is quick and simple. Factoring facility, Populous World, provides industry-expert invoice finance services and can unlock cash in as quickly as 24 hours.