Need Fast Cash?

Invoice, or Accounts Receivable, factoring is an alternative lending option for small business owners who need cash fast, but it is tied up in invoices. If you’re waiting anywhere from 30 to 90 days to get paid but you need money now, invoice factoring through ProFinance may be the answer to your problems.

Through accounts receivable factoring, a lender purchases your outstanding invoices or purchase orders. A set amount of the unpaid invoice is then advanced to you, while the lender attempts to collect the debt directly from the client. This frees up your current financial bind and the invoice works as a type of collateral for the lender, so it’s easier to qualify.

The way invoice factoring works involves a simple math formula. Depending on the terms of your lender, you will receive a certain percentage of your invoice upfront in immediate funds. The rest of the percentage is held in reserve by the lending company. The lender will collect the outstanding amount from the client, subtract a weekly factoring fee from the reserve, and then give you the remaining balance.

Since they get the cash upfront on an invoice that could have otherwise extended to 90 days or beyond, this is obviously an attractive lending option for many small business owners. In exchange for a small fee, the borrower gets immediate and guaranteed funds and doesn’t have to deal with tracking down the payment themselves.