Invoice Factoring 101
What is Invoice Factoring?
Invoice factoring is an alternative financing option that converts accounts receivable into cash. This works by selling invoices to a factoring company, like PRN Funding, at a discount. Invoice factoring provides immediate cash to manage business operations more efficiently. Factoring is a smart financing option for companies in the early stages of business development and/or during rapid growth.
How Can Factoring Help Your Business?
Invoice factoring can help your business in many ways, but the most prevalent is by creating a solution to cash flow problems. Cash flow problems often occur at the early stages of business development or during periods of rapid growth. It’s particularly problematic in the healthcare industry when completed work is unpaid for 30, 60, or 90 days after issuing the invoice. PRN Funding provides a way to fill the gap between when your company delivers a product or service and when your customer pays. Factoring turns weeks or months into hours or days.
With healthy cash flow, your healthcare business has the working capital to pay salaries, reduce debt, improve vendor relations and focus on critical success factors–operations, sales and growth. Factoring invoices is a great long or short-term solution for small and mid-sized healthcare businesses.
Immediate funds: Once you’re approved, we purchase your invoices and send you cash within hours.
Offer credit terms to your customers: Start offering credit terms (or improve your existing terms) to your customers to improve your sales.
Build your credit: Factoring can help improve your credit since you’ll have the cash flow to pay vendors and utilities on-time, or even early.
Professional collections: We provide courteous and professional collections services.
Flexible funding: PRN Funding requires no fixed-term contract, so you have the ability to factor as needed and to choose which customers you’d like to factor.
Industry expertise: PRN Funding works exclusively within the healthcare industry.
Don’t allow temporary cash flow challenges to impact your growth. Partner with us to maintain a balanced and healthy cash flow.
Want to Find Out More?
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Getting Approved for Invoice Factoring
If your business has a product or service that it provides to a creditworthy customer, then you’re a candidate for factoring. Qualification is based on the strength of your customer’s accounts receivable, not your business’ credit history.
Factoring does not create debt or require additional collateral. It is very simple to use. Cash advances from 80%-90% of the invoiced amount can normally be obtained in 24 hours or less–and as often as the business has outstanding invoices and needs more cash.
The Process of Factoring Invoices
Factoring is your chance to obtain cash without providing personal collateral or increasing interest expense. Invoice factoring is not a loan and does not “muddy up” your balance sheet. You do not accrue interest or penalties. The factoring fee is clear and objective; it is based on the size of the invoice, the length of time it takes to collect the payment, and the creditworthiness of your customers.