How Factoring Assists Companies Engaged in Distribution of Building SuppliesMost businesses who are engaged in the distribution of building supplies know that collection of payments may take a while before being processed and settled. General contractors and clients usually pay invoices in 30 to 60 days. This arrangement may be an industry practice, but it has also caused headaches to entrepreneurs who make a living out of supplying building materials to construction firms. The long turnaround time in processing invoice payments can cause financial problems to building product distributors who also have their own obligations to defray.
Building supplies distributors are also businesses that have to pay for personnelís wages, office rent, electricity bills and other operating expenses. These expenditures are on top of the debts they have to compensate with their suppliers as soon as they acquire the goods. Thus if their clients donít pay up immediately, building supplies distributors will suffer from serious cash flow problems.
Fortunately for companies engaged in building supplies distribution, there are lenders that extend factoring financing. This type of funding facility helps them get cash immediately without having to wait for their clients to pay up. Factoring for building supplies distributors is unlike a traditional bank loan that takes months to be processed and approved and requires numerous documents. Lenders that extend this type of financing simply ask for invoices in exchange of cash.
How to Apply
So how does factoring for firms engaged in distribution of building supplies work? An entrepreneur who wishes to apply for this kind of financing has to fill out an application form and send their invoices to the lender. The lender, on the other hand, will evaluate the application depending on the creditworthiness of the applicantís general contractors and clients. The process is quick and hassle-free, as the applicant does not need to provide any type of collateral. An application for a factoring line may be granted in as fast as one day.
There are many benefits that distributors of building supplies can derive from this form of financing. Foremost of these advantages is the immediate cash they can get to pay for their various obligations like payroll, office rent, utilities, payment to suppliers and other expenses. The amount they can get may vary but usually, lenders are willing to advance as much as 80% of the amount indicated in the invoices. The remaining amount less a small fee is then forwarded by the lender to the building supplies distributor once the client pays up.
Aside from the instant cash, building supplies distributors also benefit from the fast turnaround time. Factoring lines can be approved in a few days so firms donít have to wait for a long time in order to get money. Finally, there is no need for the building supply distributor to present any type of collateral when applying for this financing facility.
Enterprises that are engaged in the distribution of building supplies should find a reputable lender that grants factoring facility like Neebo Capital. We can approve your factoring application in as fast as a few hours. We can also give you rates as low as 0.59% for 30 days.
Why Choose Us?
Rates at 0.59% - 1.5% for 30 days
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General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 09/15/2011 What to know when selecting a Factoring Company
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