Many tech firms experience cash flow shortages. That’s because some of the clients take more than 30 days to complete invoice payments. This waiting duration of invoice payment can bring challenges for your company since you don’t have cash to manage payroll, buy new equipment, and pay bills.
Business Factors & Finance can offer you quick cash to ensure a steady cash flow. That means you don’t need to wait for the invoice payment.
How Factoring for Tech Company Works
Business factoring for tech companies allows businesses to access working capital without accumulating their debt. Here is how it works.
● Submit your invoices
After you send invoices to your clients after delivering technology products or services, you need to send copies of these invoices to the factoring company. You can decide which invoices to give out for factoring for tech companies or participate in the accounts receivable solution for technology companies where you can factor every account receivable you provide.
● Get your funds instant
The factoring company will authenticate your account revealable and pay up to 95 percent of the total invoice. The remaining portion goes into the reserve account until your clients complete the payments.
● Proceed with your business operations
After the factoring company pays a portion of the invoices, invoice collection goes to the company processing factoring for a tech company. As they collect invoice payments from your clients, you can use the funds to cover costs and even repay debts to increase your business’s credit score.
● Get the reserve payment
After the factoring company gets the payment from your clients, they’ll pay you the remaining part of the invoice after deducting their factoring fee.
Benefits of factoring for tech company
Factoring for tech company provides more than cash advances. By using business financing solutions like working capital loans, you can get access to advantages like:
Putting a factoring company in charge of invoice collections can help a tech company to save overhead costs while cutting staffing expenses. The factor will communicate directly with the clients about the unpaid invoices and formulate a payment plan.
● Credit and background check
The factoring company will evaluate your existing and new clients to define their creditworthiness and allocate a spending limit to approved businesses. The credit and background check allows you to trust that the customers will pay such that you can complete their orders without worries.
● Short term contracts
Long-term factoring for a tech company might be a better fit for your business. For this reason, you can choose a company that offers short-term contracts that you can easily cancel or renew.
Get the Best Factoring for Your Technology Company
Business Factors & Finance offers a fast approval process and competitive rates. So, you can rely on their invoice factoring for technology companies to order the financial support you need to grow your business. Feel free to visit their official website for more information.