Cash Flow can harm the work in process steps of inventory conversion without proper financing.
Using WIP Funding or Production Finance, these shortfalls can be improved upon and even alleviated. Work In Process Funding can provide working capital to purchase needed components for your production line.
Factors understand the issues of ordering and receiving raw materials from numerous vendors and suppliers, then converting them to a finished product, and then the logistics of shipping them to your customer.
Factoring companies, like WIP Funding, consider financing Work In Process if the client’s product is pre-sold to a customer with credit approval. Also, if they are comfortable with the manufacturing process. Factors will typically buy the needed components for its customer, and either sending them to a manufacturer for assembly, or they will assemble the product themselves. In either case, we can buy the components for you our client.