The huge new northern territory of Nunavut, founded in 1999, is one of the least populated and most remote areas on earth. Its land mass – 808,000 square miles – is about the size of Western Europe and yet fewer than 33,000 people live there. Most of the territory’s residents are members of the Inuit tribe. With its arctic climate and long winter nights so close to the North Pole, much of the territory is uninhabitable. There are many industries that can benefit from using factoring companies in Nunavut.
The Inuit economy is dependent on mining, tourism, arts and crafts, fishing and whaling, and military and weather installations. Nunavut is home to a limited number of small businesses in these industries. It’s not usual for small businesses anywhere to go through financial challenges, particularly those caused by customers’ long payment terms. Waiting weeks or months for payment can cut into a company’s working capital.
To help out during a gap in their cash flow, some companies turn to factoring, an alternative funding method that provides funding fast. When a company sells their invoices to a factoring firm, they receive the bulk of what they are due upfront. The factoring firm then collects directly from the company’s customers and sends the balance of the amount, minus a small factoring fee, when the invoice is paid in full. The company can use the cash for operating expenses or for new equipment or new staff. The funds are not a loan and do not incur additional debt, an important point for business owners in Nunavut and other Canadian territories and provinces.
Nunavut Factoring by Industry
- Mining, especially iron ore and gold
- Arts and crafts
- Commercial fishing
- Military defense
- Weather research