Businesses looking for invoice factoring require some sort of internal capital to get a company started. To be able to factor invoices, you need to have completed some work. You will need some capital to do work on an order and as far as factoring goes, you won’t be able to access additional capital until you complete the job and invoice the customer. Without initial resources a start up will have trouble finishing the order.
This is a classic example of an under capitalized venture. Every new business needs to have enough capital to get started. Furthermore they need continuing ongoing funds to sustain and grow the business. Unfortunately factoring accounts receivable is not the right tool to get a start-up started from scratch. Get some customers, and then we can talk.
Depending on what the business is, what these business owners really need are one or a combination of the following; borrowing from friends and family, seed or angle investment capital, credit arrangements with suppliers, SBA small business loan, or a small line of credit from a bank where the owner sign personally for the repayment.
Most of the time businesses fail due to lack of capital. Money is the lifeblood of all companies, insuring your access to outside capital will reward you with success.