More small and midsize companies turning to invoice factoring as common payment terms continue to leave B2B businesses with inadequate working capital.
HOUSTON, October 15, 2021 – Leading factoring company Charter Capital says cash flow issues continue to plague small and midsize businesses, leaving them without money to grow or cover crucial expenses like payroll, inventory, and rent. The culprit, according to company representatives, is the unfortunate fusion of slow-paying clients with traditional invoicing terms like Net 30. “Solving Net 30 and Net 60 Payment Terms with Invoice Factoring,” which explores how to overcome this common issue, is now live on charcap.com.
Known as “Net 30” in invoicing terms, the 30-day payment window is sometimes extended to 60 or 90 days depending on the company and industry. Slow internal processes, such as only billing once per month, can add to the burden, causing businesses to wait weeks or months to collect.
“Business owners obviously want to do right by their clients and develop thriving companies,” explains Gregory Brown Co-Founder and Executive Manager at Charter Capital. “Net 30 and Net 60 terms are often viewed as standard, so businesses offer them by default as a means to keep their existing client bases happy and attract new clients.”
The challenge, Brown expands, is that many small businesses have tight margins to begin with, and waiting on payments for an extended time leaves them without money for payroll and other expenses. Oftentimes, business owners skip out on their own paychecks or rack up late fees as a result too.
“Reducing the payment window to seven or 14 days is a simple solution, but businesses are understandably hesitant to do that in an uncertain economy when customer loyalty is hard to come by,” says Brown. “That leaves options like billing more frequently or same-day invoicing to speed up payments, but it’s not always enough to correct cash flow shortfalls.”
Because of this, Charter Capital says it’s seeing more B2B businesses looking to invoice factoring to solve slow payments caused by their Net 30 and Net 60 terms. With factoring, the business can still offer clients the payment terms of its choosing. The factoring company pays the business for the invoice right away, often on the same day, and then waits for payment from the client.
An easy qualification process, even for startups and those that have been turned down for bank funding, adds to the popularity of the solution, Brown adds. Those interested in factoring or learning more can start with a free rate quote at charcap.com or call 1-877-960-1818.
About Charter Capital
Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. To learn more, visit charcap.com or call 1-877-960-1818.
