Alaska is by far the largest state in the country: its footprint is equal to about a fifth of the total land mass of the United States. When the land was purchased from Russia in the 1860s for close to two cents an acre, no one would have believed how valuable the state’s natural resources would become. With its vast reserves of oil and natural gas, The Last Frontier state has made a tremendous contribution to the national economy over the last 50 years. There are many industries that can benefit from using factoring companies in Alaska.
Factoring in Alaska
Alaska has a very small population, relative to its size, but Anchorage, Fairbanks, and other cities along the more hospitable southern part of the state have active business communities that include small and medium-sized companies in a variety of industries. Regardless of size or longevity, any of these companies can experience periodic cash flow challenges, especially when customers’ long payment terms cut into working capital. The revenue delay comes between the time a company completes a job and submits its invoice and the time the customer pays that invoice. To bridge that gap, many companies in Alaska turn to factoring to speed up their cash flow.
With factoring, the company sells its invoices to a factoring firm, which pays them promptly for most of the value of each invoice. The factoring firm then collects directly from the company’s customers and sends its client the balance, minus a small factoring fee, once the invoice is paid. It’s a way companies can turn their accounts receivable into cash to use now. They can use the funds for operating expenses or growing their business. Some companies choose to hire more staff, purchase needed equipment, increase their inventory, or expand their sales and marketing efforts. The good news for business owners in Alaska is that they receive these funds without having to take out loans and incur additional debt.
Alaska Factoring by Industry
- Oil and natural gas
- Commercial seafood production
- Timber and wood products