Many types of companies can benefit from the use of invoice factoring. As long as a company is doing business to business or business to government (federal, state, county, city) and issuing invoices for completed work, factoring is a financing possibility. Most companies that utilize invoice factoring have a staffing element and therefore a payroll to meet. Often there is a gap between payroll and invoices being paid. This creates a cash flow issue since working capital is tied up in unpaid invoices. Factoring releases this capital.
The companies that benefit most from factoring (but are not limited to) include the following:
- Professional Services
- Architects, Engineers, Consultants
- IT Companies
- Medical – hospital, nursing home, home care
- Security Guard, Alarm and Surveillance Companies
- Staffing – administrative, accounting, temporary, etc.
- Janitorial – including general maintenance, carpet cleaning, construction, office maintenance, and pest control
- Court Reporting Agencies
- Translation Companies
Printing and Graphics Companies
- Distributors and Supplier
- Garment and Textile
- Import and Export Companies
- Transportation, Freight
- Contractors and Suppliers
Their margins are such that using invoice factoring is an excellent way for them to fund profitable growth.