Factoring Financing For Canadian Companies

Factoring Financing For Canadian Companies



Factoring Financing For Canadian Companies
Running a​ business in​ Canada has always had its particular set of​ challenges .​
One of​ the biggest challenges has always been finding the right business financing .​
The market has been dominated by banks and institutions, which have very tough and strict lending criteria .​
Obtaining a​ business loan or​ almost any other type of​ business financing in​ Canada in​ pretty difficult .​
However, that is​ changing .​
Quickly.
Recently, Canada has seen an​ increase in​ the number of​ independent financing companies that specialize in​ business financing .​
Some offer business loans, but the majority have focused on offering invoice discounting (also know as​ invoice factoring) .​
Although a​ relatively young industry, the Canadian factoring industry is​ growing quickly .​
But, what is​ invoice discounting?
One of​ the biggest problems for small and mid sized businesses is​ waiting up to​ 60 days to​ get invoices paid by their commercial clients .​
This can affect their ability to​ pay rent, suppliers or​ salaries on time .​
This problem is​ common for many businesses, such as​ trucking companies, staffing agencies, manufacturers, consultants and others .​
Invoice discounting is​ a​ financial product that eliminates slow paying invoices by financing them.
The factoring process is​ very simple .​
Once you invoice an​ approved client, you send a​ copy of​ the invoice to​ the financing company (also known as​ the factoring company) .​
The factoring company advances you a​ significant portion of​ the invoice while they wait to​ get paid by your customer .​
The transaction is​ settled once the customer pays the invoice .​
The factoring company offers this service for a​ small fee or​ discount.
An invoice discounting arrangement provides you with the necessary funding to​ pay expenses such as​ rent, suppliers and employee salaries .​
This enables you to​ operate your business efficiently, without worrying about when your clients will pay .​
Furthermore, invoice discounting can help you win bigger clients, because it​ eliminates the worries of​ having to​ wait for them to​ pay.
As opposed to​ bank financing, invoice factoring is​ relatively easy to​ obtain .​
The biggest requirement is​ that you do business with established clients who pay their invoices regularly .​
Invoice discounting is​ truly a​ flexible product that is​ within easy reach of​ small and mid sized businesses.




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