The essence of all small business finance is the cash flow maintenance.

Nevertheless, small business owners are continually confronted by what is called the 30-day cash flow “challenge”. What are the primary causes of assault not cash flow, working capital, and leadership confidence and employee morale?

1. 1. seasonal fluxes
   2. sudden orders
   3. product refunds
   4. consumer disputes
   5. 60-90 late penalties
   6. unforeseen expenses
   7. vendor price escalations
   8. taxes penalties
   9. regulations

Sadly, for the small business owner, most customers choose to wait a full 30-60 days to pay their outstanding invoices, while for the most part all suppliers would like to be paid immediately. This dilemma places a drain on resources of established businesses and especially new business with no established credit. The solution to the “cash flow challenge” to obtain solid method of small business finance.

If you are a business owner, who operates a business-to-business (B2B) company, you should keep up your sleeve an invoice factoring strategy to transform outstanding accounts receivables into cash when the opportunity arises.

What is Invoice Factoring?

Invoice factoring is a method used to overcome the cash flow challenge, where accounts receivable factoring company purchases a business’s invoices for immediate cash. Using this method of small business financing, a business obtains credit based on historical performance of its customers’ ability to pay. The business owner can provide products and services to his or her customers as business usual. Instead of losing time and money waiting for customers to pay their invoices; get immediate cash. The customers then pay their invoices to the factoring company.

Invoice factoring is a straightforward method for small business funding. It is accessible as flexible for small business than attempting to acquire a small business loan via a traditional lending source or using personal and or business credit cards to handle untimely expenses. This method allows a business owner to gain control over his or her business’s cash flow.