Industries That Benefit From Factoring

 

Factoring is a cash flow solution that turns your unpaid invoices into fast cash. Sometimes it seems like a brand new concept to some businesses, but actually, factoring has been around for a pretty long time. Believe it or not, but factoring started to became a common practice all the way back to the 1400s, primarily in England.

Although companies aren’t waiting for ships to cross the ocean anymore, there are still industries that have lengthy invoice payment terms, and that growth relies on having cash sooner than later. Here are a few industries that benefit from using invoice factoring:

• Transportation – Freight invoices are typically not paid until well after the time of delivery. This isn’t a big deal to larger transportation companies, but if you’re a small or midsize company, that cash is needed to fuel your trucks as well as to pay your drivers.
• Oilfield & Gas – Running an oilfield or a gas operation requires a pretty hefty investment in equipment, yet payment terms can run up to 60, 90 or even 120 days. Immediate access to cash in this industry allows you to take advantage of the demand for work.
• Staffing – When you’re dealing with long invoice terms along side with human capital, it can be difficult. When you have staff, there’s usually pre-employment and payroll taxes that go hand in hand with paychecks. Factoring gets you the cash to pay your employees, taxes, and still bring in cash flow that allows you to take advantage of opportunities that come up.

 

There are several other industries that can benefit from factoring, including manufacturing, information technology, distribution, other business-to-business industries that need good cash flow for growth. If your business falls into any of these categories, contact us and find out how to get started with invoice factoring.