Invoice Factoring in Connecticut

Connecticut Invoice Factoring

Small businesses are very important to the economy in Connecticut, employing almost half of the state’s private workforce in 2014.1 According to the U.S. Small Business Administration, there are 339,231 small firms in Connecticut. To remain in operation, it is crucial that small businesses receive access to a variety of small business funding options.

But Connecticut isn’t the most fiscally secure state in the union. Amidst burdensome tax policy and regulatory environment, General Electric relocated its headquarters from Connecticut to Massachusetts in 2015. And now there are concerns that insurance giant Aetna could be next. Since these major companies are also publicly traded, they may owe a fiduciary duty to shareholders to find a more tax friendly environment.

So, smaller companies that do business with these local governments and municipalities run the risk of payment delays if there is a mass exodus of larger businesses that comprise a large portion of the tax base.

Taking on more debt for your financing needs could even violate existing covenants your business may have. And obtaining a traditional small business line of credit from a commercial bank is increasingly difficult, especially for companies with limited operating history and profitability. There is a much better option with invoice factoring.

What is factoring? Simply put, it’s the discounted selling of accounts receivables to a third-party buyer. Since many small businesses have cash tied up in their receivables, they need a way to survive their cash conversion cycle. Luckily, there are a number of factoring companies, known as ‘factors”, who will buy these accounts receivable, providing up-front net working capital to the business.

And remember, factoring receivables incurs no additional debt for your business. Since invoices are accounts receivable, they are technically assets, so the transaction is an asset sale.

Major Industries in Connecticut

Important Connecticut industries include construction, health care and manufacturing. Generally, these industries result in payment delays which can stall small business growth and cause meeting obligations a struggle. Invoice Factoring is an increasingly popular funding option for many small businesses in the state of Connecticut. Popular industries include:

Invoice Factoring Companies in Connecticut

These industries lend themselves to having customers who pay invoices slowly. This can put a real crimp in a fast-growing company who needs cash flow to make payroll, invest in a new opportunity or purchase raw materials to fill a new order. Ready to provide an alternative funding options, there are a number of factoring companies in Connecticut. Many are located around Hartford, Torrington and Danbury, but there are factors located throughout Connecticut.

While many invoice factoring companies have satellite offices in a number of different states, we recommend located in the same state as your business. Sometimes, the factor can be familiar with the account debtor and has been in contact with that company in the past. A factoring company could have insight into credit and collection departments may even be better than your own. They could help your business strategy by advising which customers to extend credit sales to. Here are a few accounts receivable factoring companies with headquarters in Connecticut:

  • Foley Carrier Services (Hartford)
  • Brookridge Funding (Danbury)
  • Union Savings Bank (Danbury)

This is certainly not a full list of invoice factoring companies in Connecticut. Others with operations, not headquartered, include Bluevine, Fundbox, Riviera Finance and Fleet One factoring. If your business is interested in receiving a quote or information from a factoring company near you, please provide us some basic information about your business type, including the typical size of your accounts receivable and your customers. We would be happy to help your small business reach its financial goals.