Who Can Use Factoring Services?
Business factoring services are available to any business that extends credit to, or invoices, their clients for services rendered or products delivered. Product-based businesses such as flower shops and nurseries, department and hardware stores, and service-based industries such as “temp” agencies, landscaping companies and commercial trucking firms can benefit immensely by using factoring services.
While certain industries such as the medical and construction fields require a specialized factoring service, any business invoicing their clients is a potential candidate for factoring.
Small business factoring – financial limitations
Most factors prefer to work with companies that can supply a minimum of $5,000 to $10,000 in accounts receivables for a 30-day period. However, there are factoring companies that work with businesses that maintain less than $5,000 in accounts receivables on a monthly basis, but usually at the cost of a higher discount rate.
Businesses in high-risk industries such as the textile or garment industries are typically not desired candidates for traditional business. Business factoring allows these types of business an option to receive the financing they need.
Regardless, any company that can benefit from quick access to their invoiced funds and are able to meet the minimum monthly requirements of invoice factoring is a good candidate for this type of short-term business funding.