Small businesses are absolutely important no matter where it is that you go in the United States. Small businesses could even be considered to be critical, as they make up more than ninety nine and a half percent of all the businesses that have been established in this country. Without small businesses, much of our business force would simply vanish. And though small businesses have only five hundred employees or less, it is clear that they most definitely make their impact.
However, it is not unheard of for a small business to struggle, no matter what field of business the small business has been set up in. After all, small businesses are just that, and therefore can’t absorb blows in the way that larger or even medium sized businesses are able to do. For many a small business, cash flow becomes a problem – and problems with cash flow can all too easily spiral out of control. In fact, it is estimated that more than eighty percent of businesses that close do so in direct relation to cash flow problems.
For the nearly thirty million small businesses in the United States alone, late or even missing invoices can contribute to this problem of cash flow quite considerably. The money received from invoices is likely to be crucial for your typical small business, but it is also unfortunately true that up to sixty percent of invoices are paid late. In some cases, though certainly not all, invoices will simply never be paid at all.
This can be devastating for any given small business, as this money is necessary for the continued function of it. However, there is a light at the end of the tunnel and all hope is not lost because of these invoices. Thanks to money factoring companies here in the United States, many small businesses are able to maintain their cash flow until the invoice payments come in.
Money factoring companies provide a very important service, giving these small businesses invoice funding or what might also be called an invoice advance loan. This invoice funding through the help of money factoring companies will actually loan these small companies the amount of money they have been owed over the course of the last ninety days – or approximately three months – as a result of unpaid invoices. In this way, money factoring companies can help small businesses bridge the gap, so to speak, until the invoice payments do eventually come in.
And money factoring companies come in a number of different varieties. The top factoring companies for freight brokers, for instance, might be transportation factoring companies or even trucking factoring companies. These money factoring companies will meet the specific needs of the aforementioned freight brokers perhaps in a better and more intensive way than standard money factoring companies would be able to do.
Of course, there are some caveats when it comes to getting a invoice factoring loan from the money factoring companies that are plentiful throughout the United States. For one, it is more likely than not that your business will need to have a good credit standing before being eligible for such a loan as gotten through money factoring companies. However, the credit for a business looks quite a bit different than the credit for an individual person, who has a top credit score exceeding eight hundred. On the other hand, a business can only have a maximum credit score of one hundred, which can change how credit is viewed.
It is also important for businesses to be persistent in getting their outstanding invoices paid, even after they have worked with money factoring companies to take out an invoice factoring loan. After all, they have still taken out a loan, one that will need to be repaid sooner rather than later. Getting your outstanding invoices in as quickly and as promptly as possible can mean that you will be able to pay off the loan as quickly as possible, eliminating the debt that your business or company otherwise would have had to fight its way out of, something that is far from ideal by just about any circumstances here in the United States.