Small businesses are very much important in all parts of the United States, both to the communities that they operate in as well as to the country as a whole. As a matter of fact, small businesses actually make up more than 99% of all businesses based in United States soil. While this might seem like a relatively surprising fact, knowing that there are as many as 28 million small businesses spread out over just this one country alone makes it seem all the more plausible, all things considered.
Unfortunately, however, small businesses, who typically have 50 employees or even less, often struggle much more than larger companies and businesses, simply by the virtue of being so small. In many ways, these struggles are related to cash flow problems. It has even been found, in recently conducted research, that various cash flow problems cause more than 80% of all failing businesses to close – around 83%, to be just a little bit more specific. Many of these businesses are small ones that simply could not deal and cope with even a minor dip in cash flow over the course of time.
And even more unfortunately, many of these cash flow problems come not from a lack in sales on the part of the small businesses in question, but from unpaid invoices that are owed to the small businesses. It’s estimated that more than half of all invoices – up to 60% of them, as a matter of fact – are not actually paid on time, and can be paid quite late in the game indeed. For many a small business, this has caused a considerable amount of financial strain, financial strain that these businesses have not always been able to truly recover from. After all, bankruptcies seen in small businesses are on the rise all throughout the country.
As a matter of fact, it has been found that there were more than 25,000 companies, often small ones, filing for bankruptcy in the second quarter of the year of 2016, now a few years in the past. This marked a rise in up to 1,000 new companies, again including many a small one, filing for bankruptcy than the numbers of such companies that were seen back in the first quarter of 2016. And in the years that have passed us by since, this number has truly only continued to grow.
So what can small businesses with missing invoice payments do? How can they keep the disrupted cash flow from making them go under – or at least causing them to struggle considerably? Fortunately, there are a number of steps that the typical small business owner can take. Invoice factoring, such as through freight factoring companies or other such transportation factoring companies or even small business invoice factoring companies can be hugely beneficial and can even save the day, so to speak, allowing the business to stay operational and even still turn a profit.
Freight factoring companies and the roles that they play have become more essential than ever before, and freight factoring companies and the freight factoring services and business factoring services that these freight factoring companies provide can be found all throughout the United States and even in places outside of it. But how exactly does factoring work? What service is it that these all too important freight factoring companies actually provide?
Freight factoring companies can help to bridge invoice payment gaps. The freight factoring companies in question are likely to provide loans for up to 90 days and for no less than 60 days for any outstanding invoice payments that fall within that time period, helping small businesses to make up for any financial deficit that may exist as a result of these missing invoice payments. In fact, these up front payments can even make up as much as 90% of the missing invoice payment, which can certainly go quite a long way for the typical small business that is currently struggling to make ends meet.
Thanks to freight factoring companies and other invoice factoring companies, many small businesses and companies are able to stay open.