Do You Even Factor?

These days there are myriad lending products and providers within the Alternative Lending / Marketplace Lending / Fintech (and whatever else you want to call it!) industry.  Generally, we take this to mean and modern lending service based online, and that is not a traditional bank.  This week we’d like to highlight and congratulate Fundbox, one of the lenders we partner with.  Fundbox uses technology and advanced underwriting to factor invoices due to a business, allowing them to monetize the invoice immediately rather than have to wait the standard 30, 60 or 90 days for payment.

Fundbox

Recently Fundbox partnered with Zoho, a leading business management software service.  The partnership will allow Fundbox to offer its financing services to the many US business currently using Zoho to operate.  This is an addition to the many other partners Fundbox can claim, including Quickbooks, Freshbooks, Xero, and Harvest to name a few.

Factoring

Factoring can be a great alternative to a traditional loan for many types of businesses.  If you operate a business where you normally invoice your customers (think trucking, construction, manufacturing, staffing, etc.) and then have to wait for them to pay you, this could a great option to improve your cash flow, or at least make it more consistent.

One of the perceived drawbacks of factoring has been the requirement that the billing company needs to first send their invoice to the Factor/lender, wait to confirm that the lender approves of the invoice and the customer being invoiced, and then explain to the customer why they are sending the payment to the lender instead of the company that did the work.  Fundbox eliminates all that –  by allowing Fundbox access to your accounting software, all you need to do is tag the invoices you need to monetize, and Fundbox will automatically underwrite and if approved, simply deposit the funds in your account.  Just like that.

Our Take

At Small Business Funding, our take on factoring is that it can be a great lending product, if the merchant has the time and willingness to set it up.  Fundbox makes it so much easier to do this, which we think opens the benefits of factoring up to a whole new set of business owners who wouldn’t normally consider it.  Give us a call today to learn more about factoring in general, or Fundbox in particular.