What you’ll learn in this guide:
Janitors work tirelessly to keep schools, hospitals, office buildings, hotels, and retail establishments clean and sanitary. They might also perform maintenance on heating and cooling systems and complete a variety of other duties. Some janitors work inside, while others work outdoors, shoveling snow and mowing the lawn.
But like many other businesses, your janitorial company might wait 30, 60, or 90 days to be paid for work completed, which can cause gaps in cash flow.
Janitorial invoice factoring provides access to money you’ve already earned and a reliable source of working capital, so you have complete control over your cash flow. It doesn’t matter if you’ve been in business for many years or a few months. A small business that uses factoring can stay on track financially and meet long-term goals
The pressure of cash flow gaps on your certified janitorial and commercial cleaning company can undermine day-to-day operations. Waiting 30, 60 or 90 days for payment on your invoices can make it difficult to meet payroll, pay suppliers, buy equipment, and grow your company.
With invoice factoring, you get the capital you need to meet your daily business expenses. It can take weeks to qualify for a bank loan or line of credit. If you’re a start-up, you may not qualify at all.
A janitorial factoring company, like FundThrough, buys one or more of your open invoices and advances you the full invoice amount, less fees, often in as little as 24 hours after approval. Factoring works as a cushion against the peaks and valleys in working capital.
No more chasing down slow payments from your customers. Factoring for janitorial service providers allows your janitorial, commercial cleaning or waste disposal company to take on larger projects and bring in new customers. It is not a loan to be paid back with interest, and you create no new debt that shows up on your company’s balance sheet. You always have your finger on the pulse of your business.
According to the International Janitorial Cleaning Services Association (IJCSA), the average janitorial and cleaning service company will spend $3500 on start-up costs alone. Add hiring employees, buying equipment and supplies, and marketing your company, and cash flow becomes a top priority.
But gaps in cash flow can stifle growth. Invoice factoring for janitorial and commercial cleaning services gives you access to working capital on your terms by unlocking the full value of your unpaid customer invoices ahead of the payment terms. You get unlimited funding for your business based on the size of your outstanding invoices to use in a variety of ways.
Janitorial companies might use the funds from factoring to:
In the past, factoring was largely misunderstood. Business bank loans and lines of credit were the traditional and accepted forms of financing, along with credit cards. Each of these different funding options have pros and cons to consider.
Costs for a new or growing business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan.
A line of credit (LOC) is a lot like a credit card. You can borrow/withdraw money up to a certain maximum amount determined by your financial institution. You can cover day-to-day expenses and pay back your debt, only to borrow again when needed.
Like all forms of funding, business credit cards must be used wisely or things can go sideways very quickly.
Invoice factoring is not a loan. The application process is quick, there is no repayment obligation, no high interest rates, and no debt to record on your janitorial company’s balance sheet. Plus, many more companies will qualify.
Choosing a janitorial factoring partner is a lot like choosing any lender. It pays to do your homework. There are also several questions to ask prior to starting the application process:
Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries.
FundThrough works with janitorial service providers.
Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry.
FundThrough advances 100% of the invoice amount, less a fee.
A factoring company should be able to provide the factoring fees it charges upfront. But some companies may make it difficult to determine the total costs of using their service. FundThrough offers transparent pricing so you know prior to signing an agreement.
FundThrough pricing – 100% advance rates minus a flat fee. One upfront price.
A minimum is the amount you must factor every period (month, each quarter or every year). Some factoring companies offer plans that require minimums, while others do not.
FundThrough doesn’t require minimums. Only fund when you need to.
Cash flow is the number one problem for most start-ups and small businesses, especially if they’re growing. This is also true for janitorial service providers. Invoice factoring companies typically consider several situations before offering you an advance.
Factoring invoices is a sound financial strategy if you—
FundThrough takes the legwork out of accounts receivables financing. It’s fully automated platform is easy to navigate, it’s fee structure is transparent and a customer service rep is there when you have questions. Find out what FundThrough’s clients have to say, and start factoring your invoices today.