It’s a common misconception that 9 out of 10 businesses fail in the first 5 years. Numbers provided by the Small Business Administration (SBA) and the U.S. Bureau of Labor Statistics show that in reality, only 50% of new businesses survive the first five years. Interestingly enough, these numbers haven’t changed much over the last fifty years.
Recently, Universal Funding, one of the country’s leading invoice factoring companies, announced a new case study where they could confirm 13 out of 20 of factoring customers were still in business five years after using their factoring services. This means a success rate of 65%; 15% above the national average. Only one business could be confirmed as going out of business. There were inconclusive results in determining whether six other companies were still in business, which could mean that the success rate is actually higher than what is reported.
Additionally, Universal Funding found that five plus years later, 41% of these businesses were still active factoring clients, which is rare in the factoring industry, as most factoring agreements run their course in 12-18 months. Most companies who use factoring use it as a short-term finance solution. However there are certain industries that require factoring as a long-term solution as their payment cycles are extremely extended.
According to Forbes Magazine, “The primary reason businesses fail is that they simply run out of cash.”
Some companies turn to a bank or credit cards and incur more debt in the process. Or they sell part of the business to a partner or venture capital group, but end up having to share the profits. The 15% increase in company survival is why invoice factoring is a growing alternative for businesses requiring financing.
Statistically speaking, invoice factoring can be a cash flow survival tool for both new and established businesses.
About Universal Funding:
Universal Funding Corporation is an independent receivables factoring company, providing businesses with working capital to stabilize cash flow and foster growth. Since 1998, Universal has been developing personalized invoice factoring finance programs for a variety of industries including the staffing, transportation, printing, and oilfield industries. Based in Spokane, Washington, Universal Funding provides accounts receivable financing for companies throughout the United States.
Company Name: Universal Funding Corporation
Contact Person: Heather Burford, Marketing Manager
Email:Send Email
Phone: 800-405-6035
Address:16201 East Indiana Avenue, Suite 2600
City: Spokane
State: WA
Country: United States
Website: http://UniversalFunding.com
0 comments:
Post a Comment