Common Problems of IT Services and How They Can Benefit from FactoringThe advancement in communication that we are all enjoying nowadays is largely due to the contribution of IT services. We take for granted our ability to almost instantly communicate with our friends and family on the other side of the world. With all these advancements, we carelessly assume that all is very rosy with those who are engaged in information technology.
There are Unseen Problems
On the contrary, those who are engaged in this service find themselves financially strapped once in a while. How can this happen? If you will just consider how their services are being paid by their clients, you will understand why.
Most of their customers have the habit of paying their services with checks that will only mature after 30, 60, or 90 days. In some instances, the maturity period of the check is 6 months. Thus, you will find IT companies having to juggle their funds just so they could pay the salaries of their employees. Some have even lost the confidence of their suppliers because of unpaid bills. If this goes on, their future really looks bleak.
Factoring is the Easy Solution
If only IT services would take advantage of the financial assistance offered by factoring companies, they will not suffer financial hardships. A factoring company is the best solution because they can release the cash that you need in just a couple of days.
They will actually buy your customers’ invoices and give you the money that you need. It is as if you have already collected your money from your customers. In exchange for your emergency fund, you will agree to sell your invoices at a certain discount ranging from 2.5% to 7%. Or you can opt to pay an interest charge which is really very low compared to what the banks charge.
Factoring is Better Than Getting a Bank Loan
There are many reasons why going to a factoring company is better than taking out an emergency loan at your local bank:
- • Getting Cash is Faster
It will only take a factoring company a few days to release your funds. As soon as they get your customers’ invoices, they will compute the amount that you are qualified to take out and then release the cash. There will be no rigorous documentary requirements.
- • There is No Credit Checking
The factoring company will not subject you to any kind of background check. Your credit history and your credit rating will not figure in their decision to give you financial assistance. All they need are your customers’ invoices.
- • No Collateral Will Be Required
The factoring company knows that your customers’ invoices represent real cash although still to be collected. If these invoices are already in their hands that means they already got the money. Therefore, they will only waste their time and yours if they will ask you for collateral.
From the foregoing facts, the best solution to companies experiencing cash flow problems is to seek a factoring company. NeeBo Capital is one such company and they offer the lowest rates in the industry for IT services starting only at 1.5%.
Why Choose Us?
Rates at 0.59% - 1.5% for 30 days
Quick Link to Financial Resources:
|Purchase Order Financing||Accounts Receivable Financing||Asset Based Lending Options|
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