Accounts Receivable Factoring in Houston, TX
Sell your unpaid invoices in exchange for quick cash
The process of factoring in Houston, TX revolves around selling your unpaid invoices to what is known as a factoring company. The factoring company then takes on the responsibility of collecting from your clients. In exchange for your unpaid invoices, you receive a lump sum payment of upwards of 90 percent of the unpaid balance. Your unpaid invoices act as assets for your business. So when you sell them, you are not taking out a loan and do not have to repay anything back.
Clients and customers sometimes take a very long time to pay their bills, especially in circumstances where you have extended repayment terms to 90 days or more. This happens for a number of reasons depending on the specific customer and your industry. When your client pays the factor, they give you the remaining balance, minus the factoring fee.
Purchase Orders and Contracts
In addition to outstanding invoices, you can also sell purchase orders to obtain the funds necessary to complete the order. Purchase orders in Houston, TX act as a contract of sale indicating a customer’s intention to make a purchase. So if you need $20,000 to cover the production or acquisition and distribution costs of a $100,000 order, you can sell the whole order so you get paid up front and can immediately begin production.
Like a purchase order, you can sell almost any kind of contract where you expect payment. So instead of waiting until the end of a project, you can get the money to complete it more efficiently. Construction, manufacturing and even service industry contracts can be factored
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