Janitorial businesses often have to deal with late customer payments that can leave them cash-strapped for 30 to 60 days or more. For new and struggling companies, this time between payments can cause significant cash flow problems or even endanger the business’s survival. If you own a cleaning company how can you get the money you need to handle your ongoing expenses even when your customers take a while to pay? The answer is janitorial factoring a cash advance option for cleaning companies of all sizes.
How Janitorial Factoring Works
Like other forms of invoice factoring janitorial factoring involves selling the value of your outstanding customer invoices to a third-party firm that will advance you most of the cash value right away. After the factoring company sends you most of the money, the staff will get to work collecting on the invoice from your customers. Once the factor receives the customers’ payments, the company will send you the rest of your money after subtracting its fee for the factoring arrangement.
Benefits of Using Janitorial Factoring
Janitorial factoring offers many benefits for cleaning company owners. The arrangement allows you to get quicker access to your cash. Instead of waiting up to two months on your payments you can get your cash in as little as a few business days. With factoring, you can get up to 90 percent of your total invoice value upfront which increases your cash flow right when you need it the most.
Another benefit of janitorial factoring is that you don’t need to apply for a new line of credit to qualify for the program. This is of particular assistance to new companies that may not have been in business long enough to have established creditworthiness. For these businesses, getting a loan from a traditional lending institution may not be an option. However, companies with no or little credit can still qualify for janitorial invoice factoring as long as their customers have a reputable record of repaying their invoices.
Janitorial factoring also makes it easy for companies to handle their accounts receivable work. Since the factoring company assumes responsibility for collections the cleaning company can focus on developing new clients, rather than spending time keeping collection records and making calls for payment.
With all of these benefits and more, janitorial factoring is an ideal arrangement for cleaning companies no matter how large or small. If you decide janitorial factoring is right for your business you can get the cash you need for your company right away.