Sometimes small companies and those understaffed in the collections department may face financing difficulties. This could be as a result of slow paying clients, inability to secure bank loans or need to fulfil urgent financial obligations. Such cases call for a factoring company to fund the business as they take over the collection of invoices from slow paying clients. Growth Capital is one of the best invoice factoring Toronto companies. It offers low invoice factoring rates beginning 1%.
We deal with invoice factoring in Canada in various industries-accounting, wholesale, medical, insurance. Construction invoice factoring and logistics invoice factoring among other areas are included. However, invoice factoring is not for everyone. Described here below are factoring invoice pros and cons.
Pros of factoring invoices
Invoice factoring helps the small businesses as well as the understaffed businesses to be gainful in the following ways:
- Factoring method is cheaper than going for a bank loan because it does not need contracts
- Invoice factoring smoothens the flow of operating cash flows as factoring company assumes the collections role.
- Freight invoice factoring in tracking companies allows them to take more jobs because the cash flows are no longer tight.
- Unlike in the case of loans, the small companies do not have debts to repay as the factoring company only takes a small one-time payment from your load.
Disadvantages of invoice factoring present themselves in the form of:
- Loss of some degree of control on the account receivables and
- Alerting your customers about your cash flow troubles when they realize they are not paying you directly.
How much does invoice factoring cost
Naturally, the invoice factoring fees range from 1-6% of the receivables for companies engaged invoice factoring in Canada. Most companies will, therefore, be varying invoice factoring rates for their services depending on the volume of invoices, payment schedules and other factors described here. At Growth Capital, we charge flexible, low yet competitive fees for our services. For example, riskier industries such as hospitality and construction may be charged higher rates than others. Additional charges may be charged in case of lockbox fees, or any other reasons explained to you by the factoring company.
Do not wait for long to receive your hard-earned cash. Get your quote now.