Another financing option Elevation Capital offers is factoring, an asset-based lending procedure in which you sell your unpaid invoices at a discount in return for funding to help cover daily expenses. The buyer then collects the unpaid payments from your customers and sends you the money, minus a percentage. Effectively, you are exchanging a percentage of the money you have coming from your customers in return for being able to use the capital immediately before it gets collected.
This type of arrangement can work for industries which accept credit payments that don’t get collected immediately, including:
- Health salons
Elevation Capital’s minimum for factoring is $5,000 monthly to a maximum of $10,000,000 for larger companies. The lender doesn’t disclose factor rates on its website.
As with Elevation Capital’s MCAs, the amount you pay at a given time will depend on how much you have coming in from your accounts receivable, so the effect on your cash flow can fluctuate.
Here’s more info from our experts to help your small business thrive.