How a Factoring Company Will Save Your General Maintenance BusinessAll manufacturing industries need regular preventive maintenance as well as annual shutdowns to ensure that all of their machinery and equipment are working efficiently. But more and more companies are now relying on general maintenance companies to do their maintenance work because they are more cost-effective.
These maintenance companies are just paid their service fees and the manufacturing plant only employs a skeleton crew of mechanics and technicians to perform emergency maintenance when necessary.
But when the fees for the maintenance service are not paid on time, the maintenance company will experience a cash flow problem. Salaries have to be paid on time, suppliers need to be paid, and the bills for utilities and office rental have to be settled as well. If the maintenance company will have cash flow problems frequently, there will come a time that the only thing left for them to do is to close shop.
There is a Solution
Fortunately, there is a viable solution that will solve this cash flow problem being experienced by maintenance companies. This is by seeking the help of factoring companies. Factoring is simply a financial transaction where a general maintenance company sells its Account Receivables or invoices to a factoring company. The maintenance company offers their invoices at a discount in return for a certain amount of cash.
Value of Using Factoring Companies
There is a great value of going to a factoring company during times of financial stress. With factoring, you can ensure the continuous operation of your maintenance company. As long as you are expecting money to flow in from the invoices that you have issued to your clients, the factoring company will be willing to extend their financial help. Therefore, there is no need for you to close shop. You can ensure the continuity of your operation if you will use the services of a factoring company.
Advantages of Using a Factoring Company
There are a number of advantages of using a factoring company over that of going to the bank for a loan.
- • The processing of your check is faster.
There are no complicated processing required in getting financial help from factoring companies therefore you can get your money faster.
- • There is no need for you to have a high credit rating.
The factoring company is not concerned whether your credit rating is good or not.
- • There is no need for you to prove that you have a good credit history.
The “lending” company will not trouble themselves in checking your credit history.
- • You are not required to produce collateral.
Since the factoring company knows that you have already issued invoices to your clients, those are enough assurance for them that they will get back the money they will “lend” you – with additional returns.
Therefore, if you are operating a general maintenance company, your best option is to approach a factoring company such as NeeBo Capital. They have the lowest interest in the industry. Their terms are also the most flexible and they don’t require monthly minimums.
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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