Most cable companies outsource a number of jobs to small companies. These jobs include cable sales, cable installation, directional drilling and boring functions and placing underground drops among others. This can be great for the subcontractors that get these contracts because most cable companies are very good and reliable customers. The challenge is that they usually pay their invoices in 30 to 60 days. This places a burden on subcontractors because they need to carry their expenses for a month or two before being paid for the job.

A common way to handle this problem is to ask the cable company for a quick payment – usually in exchange for a discount. A 2% discount for a payment in 10 days is common. Many times, this simple strategy can work and fix things. If it doesn’t, another alternative is to use a specialized form of business financing known as invoice factoring.

Factoring solves the problem of slow paying customers in a simple way. An intermediary company, called a factoring company,  advances your company funds for your slow paying invoices. Your company gets immediate funds enabling it to meet expenses and complete projects. The factoring company holds the invoice until the cable company pays, and then settles the transaction with you.

Factoring has a couple of advantages over conventional financing. It’s easier to get than most types of financing and can be implemented very quickly. Also, the financing is tied to your sales which means that it can grow easily, provided you work with companies that have a solid commercial credit (like cable companies). This makes invoice factoring an ideal solution for small and mid sized cable subcontractors who have good growth potential but can’t afford to wait up to 60 days to get paid.