What is factoring for manufacturers? Factoring for manufacturing companies is the practice of selling your company’s invoices to a factoring company in order to streamline your company’s supply chain and accelerate your company’s cash flow. In short, we buy your invoices and that same day you have your cash from that invoice.
Due to the ongoing need to buy materials, to keep production moving, and to pay worker wages, many manufacturing companies are looking for solutions to maintain adequate amounts of cash-on-hand to cover these expenses.
Rather than face a cashflow struggle, many companies turn to a factoring organization, like Viva Capital Funding, to ensure they have the necessary funds to operate day-to-day and avoid any supply chain delays.
Factoring is different than a bank loan in that it turns your existing receivables into cash. This allows your company to meet your operating expenses immediately rather than waiting for a traditional loan.
The Process of Factoring for Manufacturers
After your company delivers the goods or services to your client and generate an invoice for those goods or services you’ll then submit your invoice to Viva Capital. Our team will then verify the details of the invoice. Within that same day, you will receive a cash advance of up to 90% of the invoice.
Viva only receives a small factoring fee for our service, and then when your customer pays the full invoice amount, you will receive the balance.
Benefits & Advantages of Manufacturing Factoring
Many bank loans take 60, 90 or even 120 days for approval, and with many covenants and restrictions tied to that loan. However, with our factoring service, you can receive fast payment within 24 hours that does not lead to any debt on your balance sheets.
Through factoring, you can grow your business at a much faster rate. Speed is the name of the game. When you can have the funds to move forward with your next project without waiting for the payment on a completed project, scaling becomes a much more realistic scenario.
For manufacturing companies who often need to get projects completed quickly and move on to the next one, factoring can give you a clear advantage on your competition.
In addition, we understand the needed flexibility that helps your company get the cash it needs to continue to operate and achieve the next level of growth. This is why we offer additional services besides factoring including equipment financing, asset-based lending and other short term loan options.
Who Uses Manufacturing Factoring?
Anyone from small manufacturers to established corporations can reap the benefits of utilizing factoring.
It is the ideal solution for manufacturing companies experiencing cash flow constraints due to payment delays from customers and for those businesses who wish to undertake rapid growth in a short period of time. Also, some companies don’t qualify for conventional loans due to the limited amount of time they’ve been in business. For these newer businesses, factoring can be a game-changer.
Factoring can benefit companies manufacturing in many industries including:
- Oil and Gas
- Food and Specialty Foods
- And many more
If you want to see how your manufacturing company can benefit from the positive cash flow factoring provides, contact Viva Capital Funding today.
I decided to move forward with Viva Capital Funding and leave my previous factoring company because Viva was willing to understand the needs of my business. My transition was very smooth. They made things simple and moved over my account with no hassle.
Turn your invoices into immediate cash.