With small businesses increasingly strapped for cash, a Wyoming-based invoice and accounts receivable factoring company Factoring.io launched this weekend with the aim of closing the “bill financing gap”.
“Invoice factoring remains a popular form of alternative financing for small businesses in the United States,” the company said in a Saturday, Nov. 19, press release.
“However, invoice financing can be difficult and costly for small businesses. Factoring.io will provide on-bill financing and asset-based lending at far lower costs than traditional lenders, making it more accessible and affordable for small businesses.
The company said this type of financing offers several advantages to small businesses, such as the ability to receive cash immediately for unpaid invoices, instead of waiting one to two months for payment.
The release adds that it also provides a “low-cost way to fund the company’s organic growth initiatives,” as well as improved creditworthiness and access to capital.
The launch of Factoring.io comes as small and medium-sized enterprises (SMEs) increasingly turn to digital tools to help them overcome cash flow difficultiesas PYMNTS noted earlier this month.
“Rising inflation squeezes margins. Interest rates continue to rise, making it more difficult to take on debt or tap into traditional funding conduits to ensure there is enough money in the vault to keep operating,” wrote PYMNTS. “If working capital is the oxygen that keeps any business – large or small – healthy, SMEs are on their last legs.”
PYMNTS research finds that 12% of high street SMEs doubt they will still be in business in 2024. And more immediately, 70% of SMEs surveyed told PYMNTS that supplier costs have increased over the last year, with 57% of them raising their prices accordingly.
However, the cost pass-through to customers cannot go that far, as the same economic climate makes those consumers feel strained as well.