Invoice Factoring in Nevada
Nevada Invoice Factoring
Nevada is a state unlike any other. Literally rising out of the desert, it offers visitors world-class entertainment, gambling, nightlife, golf and a host of other activities.
Over the years, visitors have increasingly turned into residents, enjoying the sun, fun and relaxed tax environment. Also, many small businesses have set up shop in Nevada for similar reasons.
But there is one place where Nevada falls short for business. A 2015 CNBC report, Best States for Business, Nevada ranked 43rd out of the 50 states in ‘access to capital’.1 Timely funding and access to net working capital is paramount for business- especially newer, fast growing businesses.
Today’s business environment lends itself to credit sales, which is great for many small business owners. But it can be a double-edged sword. On the one hand, it increases sales and promotes top line growth by adding larger customers. But it also can slow down payment receipt. Many businesses have net 30 terms attached to their bills. This means payment is due within 30 days of service or product delivery. But larger companies are increasing their repayment cycles, causing your business a cash shortage.
Instead of waiting 60 or 90 days for payment or incurring lofty rates from a merchant cash advance company, consider invoice factoring in Nevada, also known as accounts receivable factoring. Factoring is the discounted sale of accounts receivable to a third-party buyer, providing immediate funding.
There are two main types of invoice factoring-recourse and non recourse factoring. Recourse factoring, the factoring company does not take on the credit risk of your customer defaulting on the invoiced amount. You’re still ‘on the hook’ to the factor for the amount advanced.
Under non-recourse factoring, the default risk of your customer is transferred to the invoice factoring company. This can be a welcomed risk management tool for your business if you have an extremely large outstanding invoice. As you’d expect, you’ll pay a bit more for non recourse factoring to compensate the factor for the additional risk they’re taking on. Keep in mind, under most non recourse agreements, it is the credit risk that is transferred (meaning the account debtor is financially unable to pay). It does not cover non-payment for other reasons such as defective products, unsatisfied service or a separate business dispute. Be sure and read your factoring agreement carefully beforehand.
Major Invoice Factoring Industries in Nevada:
- Leisure and Entertainment
- Food and Beverage Distributors
The abundance of events in Nevada offers a great opportunity for staffing companies to operate. And with the addition of professional hockey, and possibly an NFL franchise, this is only likely to grow. But temp employment or staffing companies generally don’t receive payment until the work has been completed. This is a problem for existing workers who are waiting for their weekly paychecks. Consequently, many staffing companies choose to partner with Nevada factoring companies.
Finally, Nevada has experienced the real estate boom, leading to plentiful construction activity. But subcontractors often get the short end of the stick from the GC when conditions go south. Subcontractors such as drywall professionals, roofers and electricians often use the services of invoice factoring companies. Construction factoring is commonplace in Nevada.
Invoice Factoring Companies in Nevada
If your business is located in Nevada, you do have alternative small business funding options. To meet the cash flow needs of these businesses, a number of accounts receivable factoring companies, known as ‘factors’, are available to help businesses who have been turned down by traditional lenders. Below are a few invoice factoring companies with headquarters in Nevada:
- Global Factors (Henderson)
- Business Finance Corporation (Las Vegas)
This is certainly not an exhaustive list of factoring companies in Nevada. When choosing a factoring company to partner with consider how long they have been in business, whether they provide a dedicated representative, the types of financing they provide and read any relevant factoring company reviews you can find. These can be more important than the advertised advance rate or ‘no application fee’.
Some factors even have the financial resources to deal with tax liens and turnaround or restructuring situations. Ideally, you’d like your factoring company to be a direct lender but sometimes a 3rd party financing source will suffice. In addition to invoice financing, some factors unlock cash flow sources through options such as sale-leaseback transactions, equipment financing or the sale of non-performing assets.
Invoice factoring in Nevada may be the funding solution you’ve been looking for. If your small business is continually turned down for a loan or small business line of credit, consider factoring invoices for immediate cash today.