One of the challenges of running a small business is that every dollar counts. This means that while paying by credit card may be convenient for your customers, it likely isn’t as convenient for your business, which winds up paying service fees as high as 3% in order to receive your money quickly.
But what if I told you there was a better way to get paid – and with lower fees to boot?
If you’ve never heard of it, keep reading. After learning how much extra cash this method of payment could mean for your small business, you’ll want to ditch credit cards forever.
Invoice financing is a way for business to borrow money from a lender based on amounts due from customers. So how does it work? Essentially, your businesses would use an invoice as collateral in exchange for receiving a cash advance for the amount of the invoice. You are then responsible for collecting the invoice from the customer and repaying the lender later.
This method of small business financing is similar to “invoice factoring,” which involves paying a portion of the invoice back to the lender upfront as a fee, after which the lender collects the amount of the invoice directly from the customer. But more on that in a later blog post.
Here are four ways that using invoice financing can help you grow your small business:
Because technology has made online money transfers easy for anyone, invoice financing is worth exploring into if you’re looking to grow your business. Getting paid faster with fewer fees means more money in your pocket. And who doesn’t like a little extra cash?
To learn how ZipBooks makes on-the-go invoice financing easy for small businesses like yours, check out this press release about our new accounting iPhone app.