Invoice Factoring in New York

New York Invoice Factoring

While global mega-banks dominate New York City’s headlines, its actually small businesses that are most important to the state’s financial health. Overall, New York small businesses generate nearly one trillion in annual receipts, roughly 43% of the states total, and nearly 4 million jobs.1

In fact, there are over 455,000 small businesses in New York and the number reaches approximately 2 million when adding the self-employed.2 While most of these businesses are from New York City or Long Island, there are a large number from the Hudson and Mohawk Valleys as well as the Finger Lakes.3

But New York State is a tough place to do business, even with new efforts to revitalize upstate. The taxes  And despite improvements  in the number of municipalities experiencing ‘financial distress, it’s hard to ignore the cyclicality the state’s economy follows. While the individual towns in New York state are in relatively solid fiscal condition, it’s on the county level that the most problems exist- 18% of counties are under fiscal stress as a 2014 report shows but that number could easily soar if interest rates rise.4

This could cause delayed payments for the small businesses who invoice these municipalities for contracting work or other services rendered. Small businesses often wait 30/60/90 or even 180 days for payment. A better solution is invoice factoring which is the discounted sale of accounts receivable to a third-party.

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 merchant bank is very difficult and time consuming, especially for companies with limited operating history and profitability. If you need capital to pay for this week’s payroll, a bank won’t be of much help. And other options such as merchant cash advances have sky high loan rates.

Major Industries in New York

It’s no news that Wall Street is big business. These behemoths have ample access to funding through the capital markets, especially with yield hungry investors, both individual and institutional. But small businesses are another matter.

Invoice factoring is a popular small business funding option for many businesses in the state of New York. Major small business industries include:

  • Trade (Retail and Wholesale)
  • Professional Services
  • Construction

Given the famous Garment District and the thousands of textile and retail shops across NYC and the state, it’s no surprise that trade is on this list. Professional services often include legal and accounting services to other businesses. Like Florida and California, construction in New York is booming. Small construction firms (less than 500) employed over 283,000 workers with payrolls of $17.2 billion!5  But dealing with subcontractors and the like can be a headache without the right financial partner.

Doing business in these industries can result in payment delays from customers. This can hamper small business growth and worse- missing bank repayments, making supplier payments or even payroll.

Invoice Factoring Companies in New York

Luckily, there are a number of factoring companies in New York. These alternative financiers provide near immediate funding based on your outstanding invoices and the credit worthiness of your business customers. Keep in mind, they generally only factor B2B receivables.

While many invoice factoring companies have branch offices in a number of states, we usually recommend selecting one located in the same state as your business. The factor may be familiar with your business customer and been in contact with them in the past. Further, a factoring company may have insight into credit and collection services that are better than yours. They may be able to consult on which customers to extend credit sales to. Here are a few accounts receivable factoring companies with headquarters in New York:

  • Plus Funding Group (Tarrytown)
  • Peoples United Bank
  • Sterling National Bank (Factoring and Trade Finance Division)

This is not meant to be a full list of factoring companies in New York. If your business is interested in obtaining basic information from a factoring company near you, just provide us some basic information on your business such as its corporate structure (sole proprietorship, S-Corp, partnership, LLC, etc.), the typical size of your monthly invoices and their aging schedule. We would be honored to help your small business reach its goals.