What is Factoring
Types
Benefits
How it works
Sigma Funding
Unlock Funds Tied Up in Your Outstanding Invoices
Running a small business, either a start-up or existing operation can be challenging, especially when cash flow is tight. If your customers take weeks—or even months—to pay, it can leave your business struggling to bridge the gap between outgoing expenses and incoming revenue.
Our invoice factoring service is here to help. By utilizing accounts receivable financing, we allow businesses to convert their unpaid invoices into immediate cash by selling them to a factoring company. This financing option provides small business owners with the cash they need, when they need it, empowering you to take control of your cash flow and keep your operations running smoothly.
What We Offer
Invoice factoring is a type of business financing that allows small and medium-sized businesses to access working capital by turning unpaid invoices into immediate capital. It involves selling unpaid invoices to a factoring company, which then collects payment from the business’s customers. This method of financing is particularly beneficial for businesses that need quick access to cash to grow, hire new staff, or manage day-to-day expenses without waiting for customer payments.
Fast Access to Cash:
Turn your unpaid invoices into immediate working capital through cash advances, providing the liquidity you need when customers delay payment.
Stress-Free Funding:
No need to chase customers for payment—we can even handle collections for you.
Flexible Solutions
Tailored to meet the unique needs of start-ups, and small businesses.
How Does it Work?
Submit Your Invoice
Share your outstanding invoices with us.
Receive Funds
Get up to 90% of the invoice value upfront, often within 24 hours.
Leave the Rest to Us
nce your customer pays, we’ll release the remaining balance (minus our small fee, known as the factoring fee). The factoring fee is a percentage deducted from the invoice amount, influenced by factors such as creditworthiness and transaction volume. This fee impacts the overall cost of our factoring services and the cash advance you receive.
How to Choose an Invoice Factoring Company
Choosing the right invoice factoring company is crucial to ensure that your business gets the best possible service and rates. Here are some factors to consider when selecting a factoring company:
Customer Service
Look for a company that offers excellent customer service and support. Good communication can make the process smoother and more efficient.
Terms and Conditions
Read the fine print and understand the terms and conditions of the factoring agreement before signing. Ensure the terms are favorable and transparent.
Fees
Compare the fees charged by different factoring companies and look for a company that offers competitive rates. Be sure to understand all potential costs involved.
Reputation
Research the company’s reputation online and ask for referrals from other business owners. A well-regarded company is more likely to provide reliable service.
Experience:
Look for a company with experience in your industry and a proven track record of success. Industry-specific knowledge can be invaluable.
Frequently Asked Questions About Factoring
Here are some frequently asked questions about factoring:
What is invoice factoring?
Fact: Invoice factoring is a financial transaction where a business sells its unpaid invoices to a factoring company to receive immediate cash.
How does invoice factoring work?
Fact: The business submits its outstanding invoices to the factoring company, receives a cash advance, and the factoring company collects payment from the customers.
What are the benefits of invoice factoring?
Fact: Benefits include improved cash flow, no need to chase payments, and the ability to take on new opportunities without waiting for customer payments.
What are the costs of invoice factoring?
Fact: Costs typically range from 1% to 5% of the invoice value, with additional fees for documentation, processing, and credit checks.
How do I choose an invoice factoring company?
Fact: Consider factors such as reputation, experience, fees, terms, and customer service when selecting a factoring company.
What are the alternatives to invoice factoring?
Fact: Alternatives include lines of credit, invoice financing, asset-based lending, and improved cash flow management strategies.
Invoice Factoring vs. Other Alternative Solutions
Invoice factoring is not the only alternative solution for businesses that need working capital. Here are some other options to consider:
- Line of Credit: A loan that allows businesses to access cash flow as needed, providing flexibility in managing expenses.
- Invoice Financing: Similar to invoice factoring, but instead of selling invoices, businesses use their accounts receivable as collateral to secure funding.
- Asset-Based Lending: A type of business funding that uses a business’s assets, such as inventory or equipment, as collateral.
- Cash Flow Management: Improving cash flow management by reducing expenses, increasing revenue, and negotiating better payment terms with suppliers and customers.
Why Choose Invoice Factoring?
Most businesses must pay for products, equipment, bills, and payroll well before they see a penny from their customers. This can leave you contending with:
Eliminate Negative Cash Flow
Operating while managing negative cash flow
Take On New Business
Insufficient funds to take on new business opportunities or restock inventory
Pay Your Bills On Time
The stress of overdue bills and missed payments
With our services, you can eliminate these pain points. We ensure you have the liquidity to grow your business, meet your commitments, and never miss a chance to seize new opportunities. Factoring for small businesses provides quick access to cash through invoice factoring, helping manage cash flow and alleviate the burden of delayed payments from clients.
Take the Next Step
Stop worrying about unpaid invoices and negative cash flow. Get the working capital you need to grow your business today.
Contact us now to learn how invoice factoring can transform the way you manage your business’s cash flow.
