Understand How Factoring Helps Software ServicesSoftware services earn their keep by offering their skills and talents in software development and maintenance to companies that do not employ a full time IT staff. As such, their services are very important in ensuring that the company they serve will continue its operation smoothly and problem-free.
With more and more companies heavily dependent on them, you would therefore assume that software servicing companies would be enjoying increasing business and unprecedented growth. Yes, that would be true, if only they are getting paid on time.
As it often happens, their client companies, especially the big ones, don’t pay cold cash. The normal way is to pay for their services by post-dated checks which mature in 30, 60, and some even longer than 90 days. How can your business exist if your financial resources are tied up for such long periods? You are bound to experience cash flow problems if this situation is not remedied.
Factoring Is the Best Way
A software developer cannot wait even for 45 days to get his payment because his employees, suppliers and utility bills have to be paid on time. This is where a factoring company can be of valuable help to software services. They will buy your invoices at a certain discount and will release your money so that you can pay your bills on time. This arrangement is far better than what you can get from your local bank.
Why Factoring is Better than Getting a Bank Loan
If you will ask for financial assistance from a factoring company, you will enjoy the following benefits:
- • You Will Not Be Required to Collateralize Your Request for Financial Assistance The factoring company buys your customers’ invoices because they know that they are as good as cash. If you already have money in your hands, would you still require a borrower to cover his loan with collateral? That would just entangle you with a lot of documentation, which is just a waste of time. This is how the factoring company looks at your invoices so he will not require you to produce collateral.
- • They will not ask for collateral.
Remember, you are not borrowing money from a factoring company. They are buying your invoices which represents real cash although not yet collected. To a factoring company, your invoices mean real money. Why will they still ask you for collateral?
If your business is in software services, going to a factoring company such as NeeBo Capital will surely help in solving your current cash flow problems. Our discount range only falls anywhere in between 0.59% to 1.5%. We are not requiring any monthly minimums and our financial arrangements are very flexible.
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