Invoice Factoring: What's Fact? What's Fiction?

Invoice factoring is one of the most misunderstood and overlooked business funding methods. But at the same time, it's also the most accessible and beneficial — especially for growing companies.

Here's everything you need to know about what factoring IS and IS NOT:

FICTION: Factoring is a loan.

Factoring is NOT a loan, and does NOT create debt for your company. Once you've done the billable work, you can submit a client's invoice to a factoring company and receive cash immediately — And your client is responsible for repayment.

Avoid the loan + interest rate headache, and let your factoring company take care of it.

FACT: Factoring can increase your profits.

You get cash up-front and the company handles the dirty work (AKA the repayment), which means you can jump at any and all opportunities for growth as they pop up.

FICTION: You lose control of your company with factoring.

Factoring actually helps you gain MORE control of your company, because you get the capital you need to pay your bills and grow your business. This consistent cash flow will help you take care of payroll (on time), purchase inventory when needed, take advantage of bulk discounts and fulfill more orders.

FACT: Factoring can improve supplier relationships.

Choose factoring and you'll get cash. Get cash and you'll pay your bills quickly. Pay your bills quickly and you'll see your supplier relationships flourish — This opens up doors to discounted supplies, better communication, increased efficiency and other perks!

FICTION: The process is slow and costly.

Nope. The process is fast and accessible — for everyone. With factoring, expect to receive cash within 24 hours. And if you don't want to factor all your invoices, then don't. Factor as many or as little as you want. The choice is yours!

FACT: The amount of funding grows with your business.

Unlike other financing methods, factoring grows with your business success. As you fulfill more orders and submit more invoices, more and more cash becomes available. With factoring, your funding grows with you!

Fun Fact: Did you know Crown can factor up to $25 million in 24 hours? Wow!!!

Factoring has been underestimated for so long because the funding method is so misunderstood. The truth is...

  • It AVOIDS debt.

  • It INCREASES your profits.

  • It gives you MORE control.

  • It can IMPROVE supplier relationships.

  • It's FAST and ACCESSIBLE.

  • The amount of capital available GROWS with you.

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Invoice Factoring: Better and easier than bank loans

If you're in need of business funding, you'll come across two methods: Bank loans and invoice factoring. Small business loans are typically what come first to a business owner's mind, but... they are not always the most beneficial due to a multitude of approval steps, an excess of documentation required and high interest rates.

Enter invoice factoring, our favorite business funding method by far. When it comes to Invoice Factoring vs. Bank Loans, factoring always wins. Here's why:

1) Funding in 24 hours instead of waiting months.

The factoring process is super quick and easy. As soon as you fill out an application and your invoice has been approved, the factoring company can wire the funds to your bank account within 24 hours. Yep! You heard that right... 24 hours! No more worrying about making payroll or buying materials to keep the company moving.

Or... you can wait 60 to 90 days for a small business loan which you may not even get approved for... You make the call.

2) Factoring pays you money you're already owed instead of accruing more debt.

With bank loans, all financial responsibility falls on you, your credit and your business. With factoring, the repayment is the responsibility of your client since this is an invoice they already owe.

Here's how it works: A factoring company gives you cash in exchange for your company's invoices. Then, your client pays the invoice, just like they would have, except it goes through the factoring company since they've purchased your invoice.

3) Funding is approved based on your customer's ability to pay their debts, not yours.

Instead of investigating your company's credit-worthiness (like banks do), factoring looks at the financial strength of your customer. Funding through factoring depends on the client's credit and repayment history, and the amount of funding received is based on the value of the invoice.

4) Even startups can get approved.

If you're in the early stages of your business, most likely you have little to no business credit. Factoring lets you gain funding without the complications of a bank loan. If you've done the billable work and you have the invoice, you're good to go.

5) You have more room for negotiation.

Typically, factoring asks your client to pay back the invoice within 90 days. But this method also allows you, the business owner, to negotiate the terms of your client's payback period and interest rates before entering into a contract with your factoring company.

You also have the power to decide which invoices get factored and how often. You are in control, not the bank.

Even though small business loans have traditionally been the go-to financing method for businesses, the process is overly complicated and outdated. Invoice factoring is a quick, accessible and beneficial alternative for companies in search of funding.

Want to learn more? Click here.
 

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One Houston Financing Company - 4 Financing Options

With Crown Financial Services, you are getting an all-inclusive, one-stop shop for all of your business financing needs. When bank financing is not right for your company, Crown Financial is able to offer a variety of financing options to help your business grow and capitalize on your cash flow situation. Here are 4 different business financing options available to your business from Crown Financial:

 

Accounts Receivable Invoice Factoring

Our most popular form of financing, invoice factoring in Houston puts you in control of your money. Instead of waiting for invoices to get paid, factor your invoices for instant cash. Simply submit your invoices to Crown Financial, and within 24 hours, you will have the capital you need to meet your financial goals. One of the greatest benefits of invoice factoring vs. traditional bank loans is that it does not increase your business debt.

 

Construction Financing

Looking for financing to close a big real estate deal in Houston? Before signing anything, call Crown Financial to see how we can help you meet your goals. We are developers ourselves, and this expertise is invaluable in closing deals and underwriting large real estate projects. We underwrite projects nationwide, so geographic location is no obstacle.

 

Bridge Loans

Achieve your short-term financial goals by applying for one of our bridge loans. These loans allow you to bridge the gap while long-term financing is being secured. A bridge loan will give you the means to close on a foreclosure or take advantage of any Houston real estate opportunity in a flash.

 

Specialty Financing

Looking for specialty financing in Houston? Crown Financial offers these loans when backed by a variety of assets including inventory, aviation, vehicles, equipment, and more.

 

Call Crown Financial Services in Houston, Texas today to see how we can help you achieve your financial goals!

3 Advantages of Bridge Loan Financing

In today’s market, it is imperative to understand all of the financing options available to you and your business to ensure growth and stability. One such financing tool available to your small business: the bridge loan.

 

What is a Bridge Loan?

Bridge loan financing is a form of financing that fills the gap until a long-term financing solution can be found.  Let’s say you find a property in foreclosure that you want to pounce on immediately. A bridge loan may be the answer to securing the property while working out the long-term funding details. Bridge loans are a valuable asset to any business looking to grow and diversify.

 

How Can a Bridge Loan Work for Me?

Like all financial transactions, bridge loans have their pros and cons. Here are 3 advantages to using a bridge loan:

 

1.     Provides the Opportunity to Make Quick Decisions

Bridge loans are perfect financing tools for foreclosures or any real estate transaction that you are looking to close on quickly. Instead of waiting for a bank to process your long-term loan, a bridge financing company like Crown Financial can give qualified borrowers the funding almost immediately.

 

2.     No Long-Term Debt

As a short-term loan, the repayment period is shorter, normally designed to be paid off before the long-term loan goes into effect. Crown Financial in Houston, Texas offers repayment periods between 6-24 months, depending on your situation.

 

3.     Improved Financial Standing

Due to the short nature of a bridge loan, taking out the loan and repaying it in a timely fashion is likely to improve your overall financial standing – helping you qualify for better financing options in the future. 

 

Interested in a bridge loan to achieve your business goals? Call Crown Financial in Houston, Texas today. We strive to be the best bridge financing company in Houston, offering bridge loans as well as construction financing, other specialty financing, and invoice factoring.

Crown Financial: More than just a Factoring Company

When Crown Financial was founded, we set out to be different than your average factoring company. In the early 1970s, factoring began as a source of cash flow for many businesses, but it wasn’t until the 1990s when people began to see the legitimacy and worth of this type of business model. When your business has capital at your fingertips, you can jump on any opportunity that comes your way, thus growing your business in the long-term.

 

While Crown Financial specializes in accounts receivable factoring, we also offer other valuable services to our clients, providing them a higher level of service than your average factoring company in Houston:

 

Credit Management

As a business owner, you have enough on your plate already. Crown Financial has the expertise to handle all of your credit monitoring for you. We have the ability to check your clients – both existing and prospective – to make sure they are in good standing with major credit bureaus and that they can pay on time. This is a valuable tool when you have a prospective new client who wants to place a large order, but you are unsure about their credit standing. Crown Financial makes it easy.

 

Collection Services

No one likes to hound client’s to pay their bills, let alone find the time to do so! When working with Crown Financial, you can count on us to monitor credit and handle collections issues so that you can focus on growing your business. Our team handles these matters in a respectful, professional manner, taking the utmost care to maintain your precious business relationships.

 

If you are looking for an experienced factoring company in Houston, give Crown Financial a call today! Our team can quickly walk you through the application process and start getting you more cash in no time!

 

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Crown Financial: Approved for Government Contract Factoring

Crown Financial in Houston, Texas has 25 years of experience in business financial services, specializing in invoice factoring and accounts receivable financing.  We are proud of the solid foundation, wealth of knowledge, and strong relationships we have built over the years. A testament to our viability is our approval for government contract factoring.

 

Experience You Can Trust

At Crown Financial, we understand how lucrative your government contracts can be! Securing a government contract is a huge step to growth, security, and increased visibility for any business owner. Let those contracts work for you by factoring your government contract invoices with Crown Financial. Our reputation precedes us as an honest, trustworthy partner to help you get the most for your money.

 

Knowledgeable

As with any government contract, there is a long list of government purchasing regulations that must be met. Crown Financial is intimately aware of these regulations and will always abide by the Federal Acquisition Regulations and theguidelines laid out in the Assignment of Claims Act. You can trust your federal, state, and local contracts are in good hands with Crown Financial.

 

Committed to You

Our mission is to “Help Your Business Do Business.” We understand how important those government contracts can be, and we want to do everything we can to be the best factoring company in Houston – helping you get the capital you need to grow your business. We would never do anything that would jeopardize your relationships or cause you to lose these precious contracts. Honestly and integrity are at the root of all we do.

 

If you have recently secured a government contract on the federal, state, or local level, start maximizing your capital today with invoice factoring from Crown Financial in Houston, Texas. We know the ins and outs of the factoring process so that you can focus on what matters – your business.

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