Factoring, also called accounts receivable financing, is a useful way to get money to run your business. Rather than borrowing on credit or against a capital asset, you receive money in exchange for your invoices. This is often selling the accounts receivable to a factor. However, it can also be a loan secured against the receivables. Certain industries can benefit significantly from this type of financing.

Manufacturers

If you work in manufacturing, you likely have to purchase supplies, make your production run and deliver the product before getting paid in full. This can put a strain on your cash flow. It ties up your money while you wait for your customers to settle their balances. Financing receivables can help you to keep consistent cash flow and invest in your continued growth.

Information Technology

The IT business can also be challenging when customers don’t pay right away. There are substantial payroll expenses, operating costs and opportunities to seize. These don’t stop if you have poor cash flow. Fortunately, working with an invoice factor can help you to optimize your financial situation and be ready for any expenses.

Staffing Agencies

If you provide staffing to other organizations, you know that there can be challenges with finances whenever a slow season hits or your customers are slow to pay. It is also common in this field for clients to demand generous credit terms. If you are a small business, it can be hard to push back. Fortunately, accounts receivable financing can help ensure you always have the cash you need.

Construction

Businesses in the construction field may struggle with unexpected increases in the price of materials. Additionally, slow-paying clients and seasonal slowdowns are common. Furthermore, the construction field can often boom, requiring you to quickly expand. In all these circumstances, having an invoice factor to turn to for funding can be helpful.

Energy

The energy business is dominated by a few major conglomerates. While there are opportunities for smaller operations, it can be difficult to put your foot down about credit terms. Fortunately, you don’t need to worry if you factor your invoices. This is one of the simplest ways to ensure your continued financial health.

Learn More

Discover more about invoice factoring and its benefits. This can be a helpful tool for businesses in the above industries and many more. The more you know about this type of financing, the more you can achieve with it.