Advantages Of Factoring

Is Your Company Suffering from Insufficient Cash Flow?

Insufficient cash flow can create substantial hurdles for small businesses. When customers delay their payments for 30, 60 or 90 days, it can harm your available funds and force you to take on unwanted debt. One solution to consider is invoice factoring, which provides fast and consistent invoice payments at time of invoicing and frees you from having to wait for clients to pay their outstanding invoices.

What Is Invoice Factoring?

Invoice factoring is a type of financing used to boost a company’s working capital. Invoice factoring is not a loan – you are provided a cash advance for your unpaid invoices. You complete your service to your customer and sell your unpaid invoices to a factoring company. Once you’ve sold the invoices, you collect payment promptly from the factoring company, minus a small fee.

Our Process

Step 1: Apply

Complete form &
become an Ark Client

Step 2: Service

You deliver your
products or services

Step 3: Send

Send your invoices to
Ark Capital Funding

Step 4: Get Paid

Ark Capital verifies &
pays you within 24 hours

What Are The Advantages of Factoring?

Whether you’re a small business owner or manage a large operation, factoring invoices can be a major asset for your B2B strategy. It offers benefits that other traditional learning options can’t provide, plus it is a more accessible solution for many businesses. Invoice factoring provides some important advantages for small businesses.

Immediate Boost in Working Capital Rather than having to wait 30, 60 or 90 days to get your invoices paid by your customers, you can typically collect payment in as little as 24 hours by the invoice factoring company. This gives your working capital an immediate boost and allows you to get back to business.
Easy Approval Applying for invoice factoring is much easier than getting a business loan from a bank. Getting a loan can prove out of reach for many businesses with limited collateral and a short financial history, whereas invoice factoring may be a viable option.
Unlock Business Growth Factoring your invoices helps your business unlock capital needed to finance growth without giving up equity. You can enjoy enhanced cash flow without sacrificing equity in your business or taking on unwanted debt.
Easily Meet Business Expenses Many businesses experience ebbs and flows which can be influenced by the economy or seasonal trends. With invoice factoring, your cash flow can be more consistent year-round, allowing you to more easily meet payroll and other business expenses.
Outsource Collections When you factor invoices, the factoring company handles collections. This saves you and your employees time and energy that you can devote to other tasks.

Why Wait?

Start getting paid immediately

How Does Invoice Factoring Work?

The invoice factoring process is pretty straightforward and easy to follow. Here are the steps to apply for invoice factoring with Ark Capital.

Submit a factoring application.
The factoring company approves your application and sets a credit limit for your customers.
You submit the invoices you want to factor, which may be some or all of your invoices.
You deliver your products or services as usual.
Once delivery is verified, you receive payment in as little as 24 hours. Depending on the terms of the service and your industry, you’ll receive anywhere from 80% to more than 95% of the invoice’s value.
Your client pays the invoice, usually within 15-60 days, sending the payment to the factoring company.
At this point, the factoring company will collect their fee and forward you any remaining balance.

What Industries are Eligible for Invoice Factoring?

Many industries can benefit from invoice factoring. Some of the most common industries are:

Freight and Transportation
Government Contractors
Consulting
Oil & Gas
Staffing Firms and Temp Agencies
Handyman and Repair Services
Underground utilities

Telecom
Programmers and Web Developers
Landscaping and Gardening Services
Photographers and videographers
Security guards
Auto repair shops
Janitorial and commercial cleaning

If your industry isn’t included in the above list, no need to worry. Ark Capital Funding can put together a custom invoice factoring solution for your business. The main qualification is that you provide a service and invoice other businesses.

FAQ

What is the main advantage of factoring?

Invoice factoring has several advantages, but the main advantage of factoring is the immediate cash flow boost it provides a business. Unlike many financing options, factoring does not require the borrowing business to tie collateral to the funds. For many business owners, this is the most enticing aspect of invoice factoring.

How much do factoring companies charge?

Generally, a factoring company will charge 1-5% (this is considered the “factoring fee”) of the total invoice value, depending on variables such as your factoring volume, invoice size, risk profile, and client credit. If your company factors many invoices and works with trustworthy clients, your fees will generally be lower.

What type of business typically utilizes invoice factoring?

We encourage small to medium-sized businesses to look into invoice factoring, as typically these are the businesses that would benefit most from quick cash flow boosts. It’s important to explore and weigh your options, so if you’re a business owner with questions about the factoring process, feel free to give Ark Capital Funding a call at 1-800-872-7484 or contact us online.

Transportation
Freight
Oil & Gas
Energy Funding
Temporary Staffing
Telecom
Underground Utility & Cabling Contractors