Factoring Financing Can Make Repairs Services More CompetitiveMoney is an important resource for every business. Firms like those engaged in repairs services need it to pay for operational expenses like personnel salaries, store rental fee, advertisements, and other expenses. Yet repair service companies donít get paid on-time by their clients. It is an industry-wide practice for these repair service firms to wait for months to get paid by their clients. While this practice can ensure a steady flow of projects for the repair service firm in the future, it also causes cash flow problems to the company itself.
Bank loans donít qualify as a viable source of funding for these companies. Aside from taking months to process, a bank loan also puts a small company in debt something which proprietors of repair firms are not interested in.
Understanding the needs of small businesses like repair service companies that canít qualify for a bank loan, lenders have devised a way to grant money to these firms in a quick and easy way. Through factoring financing, small companies can get access to instant financing in exchange for their invoices. Aside from being uncomplicated, the arrangement enables enterprises to become more competitive.
How Factoring Works
Business invoice factoring is a fairly straight-forward transaction between a repair service company and a factoring lender. The repair services firm approaches a factoring lender and presents its invoices addressed to their customers. The factoring lender then evaluates the creditworthiness of the repair services firmís customers. Repair services companies which have reputable companies stand a chance to get as much as 90% of the total value of the invoices, with the money released on the next working day.
In turn, the factoring lender collects the payments from the customers of the repairs services enterprise. It then sends the remaining balance to the repair service firm less an arrangement fee.
Staying Ahead of the Competition
Repair services firms that apply for invoice factoring can stay ahead of their competitors. The money that a repair service enterprise gets from the factoring facility can be used for operational costs like personnel wages, office rent, and payment to suppliers. Forward-thinking managers and owners of repair service businesses even use the money for other investments like purchasing of new equipment that will improve operations, or recruiting new laborers to hasten the production turnaround.
Repair companies that access funding from invoice factoring lenders could also use the money for advertising their services through traditional media. Even the installation of company signage may be paid for by the money acquired through invoice factoring. These expenses will generate more businesses in the end, as the general public will become more aware of the services offered by the repair firm.
Repairs services companies stand to benefit a lot from a business invoice factoring arrangement. NeeBo Capital is one of factoring lender that repair firms can approach for their funding requirements. Aside from offering competitive rates, NeeBo Capital can facilitate quick processing and approval of a factoring application. Contact NeeBo Capital now to avail of instant money for your business needs!
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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