Last Updated on September 13, 2021
Janitorial services companies offer an extremely valuable service to a wide range of customers. However, they often struggle with cash flow issues because of payment delays, even if they have customers with strong payment histories and solid reputations. That’s because they’re stuck with 30-90 day payment terms, meaning that the work they complete today may not get paid for one to three months.
One of the best cash flow solutions for janitorial companies is invoice factoring. altLINE and The Southern Bank have been helping janitorial customers improve cash flow since 1936. Because we’re a bank, not an independent factoring company like most others, we cut out the middle man. Our factoring services are more trusted, more affordable and all backed by the FDIC. We understand the unique challenges that face the janitorial services industry, and we’re prepared to help keep your business on track and growing.
What is Factoring for Janitorial Services?
Like we said before, invoice factoring is a unique financing tool for janitorial services companies. But what is invoice factoring?
Factoring is the process of selling your receivables to factoring companies (also known as a “factor”) in exchange for cash up front. The factor typically advances between 80-90% of the total invoice value. Once the invoice is paid by your customer, the factor will release the remainder to your business, minus a small factoring fee (typically 1-5%).
Why Factoring Works Well for the Janitorial Services Industry
Janitorial services companies are the perfect fit for factoring, because they’re B2B business that submit invoices after work is completed. This means there’s little to no negotiation of payment once the invoice has been submitted to the customer – unlike other industries like construction.
On top of that, janitorial services companies deal with long payment terms, significant overhead and equipment expenses, and frequent payroll deadlines. This strains many janitorial services companies who must operate with limited cash flow at their disposal. Some struggle or fail to stay afloat without sufficient and affordable financing. Invoice factoring allows janitorial services businesses to extract cash immediately from their receivables, dramatically shortening the payment cycle and promoting growth.
What makes janitorial services factoring different from traditional bank financing?
Unlike a traditional bank loan, invoice factoring for janitorial services companies is not a loan at all. Its the sale of an asset (your outstanding invoices) in exchange for cash. That means it will not count against your credit rating. The minimum requirements are more accessible for this type of financing, allowing businesses with limited operating history, lower credit scores or few assets to borrow against.
What are the benefits of factoring with altLINE?
We’re top-ranked by Investopedia, TheBalanceSMB, Business.com, Fundera and Merchant Maverick. Why do they rank us so well?
Our services are competitive:
- Rates from 0.50%
- Advances up to 90%
- No Application Fee
- No Hidden Fees (Ever)
- Fast Approval
- Local Customer Service
Our track record is strong:
- In Business Since 1936
- Over $600 Million in Funded Invoices
- We’re a trusted community bank (and a factoring bank)
Want to find out if factoring is a good fit for your janitorial services company?
If your business is short on cash, but have lots of outstanding invoices, you might be a fit. To get a free quote, apply here or call (205) 607-0811 to speak with a sales representative today. We look forward to helping you grow.
Jim is the General Manager of altLINE by The Southern Bank. altLINE partners with lenders nationwide to provide invoice factoring and accounts receivable financing to their small and medium-sized business customers. altLINE is a direct bank lender and a division of The Southern Bank Company, a community bank originally founded in 1936.