Invoice Factoring in Alabama

 

Alabama Invoice Factoring

In many ways, small business is the lifeblood of Alabama. Their 323,891 small businesses employ roughly ¾ of a million Alabama workers.1

Not surprisingly, Alabama is also well-represented on Wallethub’s list of Best Small Cities to Start a Business. The study analyzed a number of factors including labor costs, investor access and growth in the number of total small businesses in the city.2 Dothan is the top ranked city from Alabama on their list, coming in at #31 overall. Other cities that made the list include Tuscaloosa (#76) and Bessemer (#161). In all, the state had thirteen cities on the list.3

The top-ranked small city for business was Holland, Michigan.4 Utah was also well-represented as the only state with two cities (Springville and Clearfield) to make the top ten.5

In all, small businesses employ nearly 48% of Alabama’s working population.  And this number is likely to increase-a 2017 study conducted by America’s SBDC reported that half of all millennials plan to start a business within the next three years.6

But a huge problem that many of these startups will likely face is access to capital. Many businesses experience cash flow problems or negative net working capital stemming from outstanding invoices. Invoice factoring in Alabama may be the solution to their short term capital squeeze. Wondering what is factoring? Instead of selling equity ownership in exchange for investor capital, an increasing number are turning to alternative financing options such as accounts receivable factoring and invoice financing.

Major Invoice Factoring Industries in Alabama:

Transportation

Because of its central location in the Southeastern United States, trucking companies are prevalent throughout Alabama. But independent trucking companies know that delayed payments is part of the business since they are typically not paid until their pay load is delivered. In the meantime, there are plenty of costs that are incurred including tolls, fueling and general maintenance. This cash flow shortage often causes truckers to turn down additional business.

Staffing

It is no secret that the citizens of Alabama like their college football. Whether you holler Roll Tide or War Eagle, the passion for both sides is the same. These sporting events utilize the services of temporary staffing companies to put on a gameday that appeals to such a rabid fan base.

Temporary staffing agencies often face cash flow problems since they must wait until the job vacancies have been filled and worked for payment from their client.

Invoice Factoring Companies in Alabama

As such, there are a large number of businesses that have decided to start factoring invoices to improve cash flow and profitability. Given this opportunity, a number of invoice factoring companies, known as factors, have sprung up in the state, while others have been serving small businesses for decades. Here are some invoice factoring companies with headquarters in Alabama:

  • AloStar Bank of Commerce (Birmingham)
  • Convoy Capital LLC (Birmingham)
  • Corporate Billing, LLC (Decatur)
  • Interstate Billing Service, Inc. (Decatur)
  • Momentum Capital Funding (Birmingham)
  • Porter Capital (Birmingham)
  • ProBilling and Funding Service (Decatur)
  • WilCo Capital Inc. (Birmingham)

With the exception of Texas and Washington State, Alabama has the most factoring companies that are also members of the IFA. There is a good reason for this-their robust transportation industry, specifically trucking. The state’s centralized location in the southeast provides quick access to larger markets such as St. Louis, Missouri, Atlanta, Georgia and Tampa, Florida.

There are some larger factoring companies that have branch or satellite offices in Alabama but we prefer partnering with a factoring company headquartered in the state. This way, they understand the industries and are typically connected to the right resources that can serve your small business the best.

Consider Invoice Factoring In Alabama

If your business was denied a traditional credit and is experiencing a cash flow crunch, consider financing or  factoring receivables. Some invoice factoring companies in Alabama have asset based lending rates as low as a few percent.

If your business is seeking funding, but is having trouble accessing capital from traditional methods, consider factoring your outstanding invoices. Many factors advance up to 90% of the invoice’s face value the same day. So the speed of funding is tough to match. Also, because non recourse factoring is technically an asset sale (not a loan) your business incurs no additional debt. The factoring companies also provide credit and collection services so you can focus on actually running your business.

Further, some factors will use soft contact techniques, meaning that when they call on the account debtors for a friendly reminder, they can represent your business (your client won’t even know you are using a factoring company). As you can expect, this contact could go either way so make sure you choose a factor with a reputation and experience in such policies. We know who the good ones are.

 

1http://www.gaebler.com/Number-of-Small-Businesss-in-Alabama.htm

2,3http://www.al.com/news/index.ssf/2017/04/alabamas_best_small_town_for_s.html

4,5https://wallethub.com/edu/best-small-cities-to-start-a-business/20180/

6http://asbdc.org/half-of-millennials-plan-to-start-a-business-in-the-next-3-years/