And your lending partner can also help you with these calculations. With invoice factoring, you can calculate how much working capital you’ll have access to once you factor your invoices. When you meet with your factoring partner, come ready with that number. Step 3: Calculate how much working capital you need for your goalsīased on your immediate and long-term plans, you probably have an idea of how much capital you need flowing into the business. If you’re referring a client to Liquid Capital, establishing a long-term partnership with your Liquid Capital Principal can open new doors for your business. The agreement will outline what account receivables (ARs) or invoices the factor is purchasing, along with other terms and conditions that will help fast-track future financing. Once you’ve selected a factoring company (also called the “factor”), you’ll sign an agreement that marks the beginning of a formal business relationship. Step 2: Sign a factoring company agreement Related: Is your cash flow suffering from 90 day payment terms? Invoice factoring can help Selling them to a factoring company can provide you with immediate cash flow, as invoices with much longer terms may not always be eligible. If you have invoices that are due in the short term (for example, in 30, 60 or 90 days), these could be the right invoices for factoring. Step 1: Do your invoice payment terms qualify for factoring? If you know invoice factoring is the right choice to accelerate your cash flow, here are four simple steps in the process to help you access capital: Learn the critical questions you should ask any invoice factoring provider in the Invoice Factoring GuidebookĪccelerate your cash flow in four simple steps Your answers should match your business needs and help you decide if the factoring company can get you the funds you need.įor a more in-depth guide, take a look at our free invoice factoring guidebook that features ten questions that will help you pick the right factoring partner for your company. How quickly does it take to get approved for invoice factoring?.
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