Monthly Archives: April 2018

Normally with the traditional financial institutions such as banks to get any kind of loan you need to maintain good credit score. If your credit score is less you will not be able to get any type of loan from them. This is because they rely on the credit score to judge the person’s capacity to repay the loan. If you are a business man and with the income will not be the same throughout the year, you may need loans at some point of time to invest in business or expand the business. In those times, if your credit score or your business credit score is not good, you won’t be able to get the loans from banks. But these days are over now. With the advent of factoring companies you can say no credit no problems and invoice factoring companies will help you in business.

How it works

These companies provide the amount equal to the account receivables of your company so that you can run the business without any problem. It is not new type of loan. It is getting the amount you are entitles in advance so that your production does not stop due to the shortage of funds for investing. This will be helpful for the companies which have high due time for the customers and also for the companies whose invoice values are always high. But at the same time it won’t be helpful if you are mainly dealing with the international customers and or if your clients have bad credit habit. Normally these companies won’t check your credit score but your client’s credit score.

Once you have supplied the material and raised the invoice to your clients, you can send the same to the factoring companies and on the receipt they will check the credit worthiness of your client. In case if they are satisfied with the results they will approve the invoice and will wire the initial portion of the invoice amount and balance will be wired after the client pays the amount to them. Incase if they are not satisfied or the client’s credit score is not impressive they will reject the invoice and will send back to you. This method of factoring the invoice gaining popularity across the country and lot of invoice factoring invoice companies have came up recently.