What is Invoice Factoring and How Does it Work?
Factoring is a solution for small companies in industries with extended payables periods and consistent cash flow. When you need to pay the bills, or a significant unforeseen expense happens, you and your business cannot afford to wait weeks for the cash to go into your account.
By factoring with OFS, business owners can access an affordable and quick cash flow solution with best-in-class service. A client can sell their accounts receivable to OFS in return for a 90% cash infusion upfront by sending in invoices. This cash flow allows a business to take on promising opportunities that otherwise would have been outside of the carrier’s capacity at the time. Your business can take back the opportunistic initiative it takes to be successful and grow in an ever-changing industry for a nominal fee.
No longer will you be hampered by tedious collection processes and unpredictable payables periods.
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Advantages and Benefits of Invoice Factoring for Small Businesses
- Steady and predictable cash flow
- Low risk
- Relieves financial constraints to help grow business
- Advances collections process
- Frees up time to focus on money-making tasks
Why Throttle the Growth of Your Business?
Have you ever had a time where a great new business venture is presented to you, but you cannot take it due to a lack of liquidity in your books?
Factoring is a unique and underutilized solution to a problem that many small to medium-sized enterprises face in today’s challenging markets. Many small businesses are tasked with complex collection processes that can be drawn out for weeks. Our expert collections team, led by Connie Ward, will fight for every cent of your money. Rather than spending all your time tracking down paperwork and balancing figures to keep your business running, why not let us handle that at OFS so you can keep your focus where it should be, on the growth of your business.
- “Jim” carries a freight load assigned by a broker or found on the load boards.
- Once delivery is complete, “Jim” receives an invoice for his services which will be paid in 40 days.
- “Jim” cannot afford to wait that long to receive payment, because bills are due next week, and “Jim” needs cash to continue operating at capacity.
- “Jim” sends his invoice to OFS, and within 24 hours he receives 90% of the value in his bank account. “Jim” can use this money to continue operating tomorrow rather than waiting weeks to be paid.
- OFS is paid on the invoice through their expert collections team, and once a typical factoring fee is charged by OFS, the remaining value goes into reserves.
- One day, an unexpected expense threatens the health of “Jim’s” business, but due to his reserves which have built up through factoring, “Jim” is able to cover the expense and continue operating. Since the reserves are able to be pulled at any time, “Jim” can rest easier knowing he has the money to withstand unplanned expenses.