With a landmass of more than 500,000 square miles and a population of only around 45,000, the Northwest Territories (NWT) still can claim to have the most population among Canada’s three northern territories. The territory also has Canada’s highest per capita contribution to the gross national product (GDP): around $76,000 in 2009. In 1999, the area was divided into Nunavut and the Northwest Territories. Yellowknife is NWT’s territorial capital and home to the majority of people in the area. Mining is an important part of the territorial economy, with millions of carats of diamonds exported every year. There are many industries that can benefit from using factoring companies in the Northwest Territories.
With so few people, the business community is not large, but the territory is home to a number of small businesses. Any company can have its ups and downs and often many of their financial challenges could be eased by customers’ faster payments. Regardless of a company’s size or longevity, customers’ long payment terms disrupt its cash flow. That’s when companies in the Northwest Territories can turn to factoring, an alternative funding method that provides funding fast.
The business can sell their invoices to a factoring firm, which pays the company upfront for most of the value of each invoice. The factoring firm collects directly from their client’s customers and sends on the balance of the amount, minus a small factoring fee, to the client once the invoice is paid in full. A business can use this infusion of cash for operating expenses or can work to build the company with new inventory, facilities, equipment, or staff. Invoice factoring can bring capital to NWT business owners without them having to take out loans and incur additional debt.
The Northwest Territories Factoring by Industry
- Mining, especially diamonds, gold
- Oil and natural gas