Here in the United States, invoice factoring services of all types are far from uncommon. From transportation factoring companies and the typical trucking factoring service that they provide to the top factoring companies for freight brokers to even just small business invoice factoring, invoice factoring services truly come in all shapes and sizes. And invoice factoring services have become essential in many different ways.
First, of course, it is important to fully understand what invoice factoring services really are and why it can be important to get an invoice advance loan – as well as who is getting them in the first place, of course. Invoice factoring services work by converting any outstanding invoices (sometimes even up to 90% of them, though some companies providing invoice factoring services will only be able to convert around 60% or 70%) into a cash loan. After a certain amount of time, this loan – and a small service and transaction fee – will be paid off.
But who is using these invoice factoring services in the first place? Typically, small companies throughout the United States will rely on them at one point or another, and the business of invoice factoring services is a thriving one all throughout the country. For one thing, small businesses are plentiful in and of themselves, making up more than 99% of all businesses based here in the United States. In total, that means that there are very nearly 28 million small businesses found in this one country alone.
But as important as small businesses are, it is certainly not uncommon for them to struggle to make ends meet and, ultimately, to stay open for business at the end of the day. This is something that can be seen all too clearly in the ever climbing number of bankruptcies that are filed on a yearly basis, something that the data very much supports. This data shows that more than 25,000 bankruptcies were filed back in the second quarter of the year of 2016, a considerable increase even from the first quarter of that very same year, in which just over 24,000 companies had filed for bankruptcy. In the years that have transpired since, this number has only continued to climb.
For many a small business, cash flow is a real problem and in fact least to more than 80% of businesses that ultimately fail to, well, fail. In many ways, this can come about – or at least be spurred on by – missing or late invoice payments. Unfortunately, the majority of all invoice payments are actually late – up to 60% of them at the last time that data was collected on the subject. In many cases, this can be hugely detrimental to the small businesses impacted, as it can affect cash flow in quite the significant way.
Fortunately, invoice factoring services from reputable invoice factoring companies can be hugely beneficial. In fact, such invoice factoring services have saved many a business over the course of time – and will likely save many more in the years that are to come too, especially when we look into the small businesses that can be found all throughout the country as a whole. For many people, invoice factoring services have been monumental, saving a business that was just barely hanging on thanks to missed invoice payments.
Of course, some smaller changes can end up being quite beneficial as well. Simply switching to an electronic invoice system can be hugely beneficial as a cost saving measure for many a small company here in the United States. After all, paper invoice systems are quite bit more expensive – some estimates even put them as being up to 57% more expensive than electronic invoice systems. Making the switch over to an electronic system can even, in some cases, help to avoid the need for invoice factoring services entirely, though it is of course important to note that this will not be the case for every small business found all throughout the country.