Invoice Financing vs. Informal Loans
Cash is the lifeblood of a well-run business. A lack of liquidity or inadequate cash management brings with it a lot of troubles, especially for small and medium enterprises (SMEs). Payroll, rent, inventory, taxes—all these things require funding. When the cash flow stops, would you turn to invoice financing or turn to informal loans i.e. borrow money from family and friends?
While your loved ones may be willing to shell out some money to help you with your business troubles, this type of solution is not ideal and not recommended. Not only can it put a strain on your relationships, especially if it involves a large amount of money, but it may also impinge on your role as the business owner. By lending you money, family and friends may feel that they have a say in how you should run your business, becoming a pseudo “investor”, even without a formal agreement. Such an arrangement may attract unnecessary trouble and may do more harm than good.
On the other hand, in contrast to these kinds of financial set-ups, invoice financing is all about doing business, so you don’t have to worry about stepping on anyone’s boundaries. In fact, factoring companies always do their homework and evaluate the invoices they purchase. This means if your invoices are eligible for purchase, you will have a black and white agreement with the company. Here at J&D Financial, all you have to pay for is the required fee to process your transactions, advance your cash, and collect on your accounts receivables.
Aside from providing you with immediate cash through the sale of your invoices, invoice factoring or financing has added benefits such as freeing up your time to focus on your business. This is because some factoring companies have collection services, so you don’t have to worry about collecting from your clients. Additionally, they may also have bookkeeping services where you can regularly receive updates regarding your receivables; J&D Financial is one such company that offers a full range of services.
Other services included in our invoice financing service is credit checking. We provide each of your buyers or clients their own line of established credit so you can easily keep track of their status. We also have an in-house legal department should we run into any trouble collecting your receivables.
For inquiries about our invoice factoring, please do not hesitate to contact us at 1-305-893-0300.