Most small businesses serve larger companies or government agencies that require their vendors to submit invoices with Net-30 day (or longer!) terms. The root of the small business cash flow problem is often that they are in fact providing free financing to their customers.
Although all small business owners want to grow and prosper, very few have the necessary working capital to handle increased orders in times of economic expansion or to manage extended invoice payment during slow periods.
The financial tool known as factoring, which is the purchase of accounts receivables (invoices) at a discount at or near the time of invoice creation, can help solve this common cash flow problem!
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