Invoice Factoring: An Alternative to Venture Capital Financing
Individuals looking to start a business may look to venture capital financing as a way to fund their dream. Private investors may advance funds to companies that are growing rapidly and potentially can show a profit. Of course, investors are looking for a return on their investment, whether short term or long term. This can be quite difficult for a new business to handle. It is very difficult, especially in today's economic times for companies to receive these types of infusions. For these companies, it will be necessary to find alternative funding. One really great alternative is invoice factoring.
Invoice factoring can provide quick cash flow. It allows companies to get paid on newly shipped orders to their customers even when they allow their customers 30 day terms or longer in order to be competitive. DSA Factors can provide funding for these invoices within 24 hours. This is much simpler than attempting to secure venture capital financing. Using a factoring company eliminates the worries of having to pay back borrowed funds or pay dividends to an investor or maybe even giving up ownership to outside investors. Factoring is not a loan. Factoring involves being advanced money for recently shipped goods so that the funds are available to help fulfill future orders and be current on your bills, such as payroll, utilities, inventory, and supplies. Also a bonus to factoring your receivables with DSA Factors is that they do all the collection work from your customers. Companies also do not have the burden of going out and securing business in order to pay back venture capitalist lenders. They are using the business they have already secured and leveraging it for much needed monies.
As a business grows so does the amount of money that they can secure through factoring. Cash advancements grow with sales volume. The more invoices they have outstanding, the more money they can receive.
Invoice factoring can also be used by new or start-up companies. The difference between invoice factoring and venture capital financing is that companies will not have to pay money back when they use the former option. This means less stress, worry and no debt. Companies also have more control over their business because they don't have anyone directly and monetarily invested in their company, feeling like they have the right to tell them what to do.
Venture capital financing can be a great option for companies that need a lot of money to begin a company but have no customers. However, for those companies that are newer and have already secured customers, a clear choice is invoice factoring. It allows them to get a quick infusion of cash without taking on debt from investors.
For more information please contact DSA Factors today at 773-248-9000 or info@dsafactors.com.
