One of the advantages of being a plumber is the independence that comes with the job. While you may have maintenance visits set to a regular schedule, more often it’s a job of emergency calls and unexpected situations. This type of job keeps away the monotony of a more structured career but also can leave plumbers in a pinch when an emergency call means an unexpected purchase of an expensive part. Traditional bank financing cannot help in these quick-turnaround situations, but factoring most certainly can.
Factoring is a financing method in which a business sells its accounts receivable at a discount to a factoring company, which allows an immediate infusion of cash into the business, not 30 days or more later. The majority of the invoice value (typically 75% to 90%) is advanced within 24 hours, with the remainder released at the time the invoice is collected. Since the reserve amount (10% to 25%) is returned once the invoice is paid, it should not be confused with the discount fee, which is a small percentage of the total invoice amount.