Benefits of Factoring
Giving You the Ability to do more!
Factoring is not a loan; it is an agreement to sell your invoices at a discounted rate with the factoring company assuming the credit risk for the purchased invoices (if agreement is Non-Recourse), which gives you restriction-free cash flow almost immediately. Because of this, the requirements and qualifications for invoice factoring are much different than a traditional bank loan or a line of credit. This makes invoice factoring a beneficial choice for many businesses, especially new, small, or growing businesses or ones who may have poor credit because the criteria are based off of your customers’ ability to pay – not yours.
This cash flow will allow you to pay necessary expense related to your business immediately. Allowing you to build better credit with your suppliers and vendors and possibly better credit terms. With the security of a factoring company, you can confidently take on new business, knowing they will fund them upon completion. It is a great way to increase your cash flow without taking out a bank loan or a line of credit. However, because you are dealing with cash, it is important to be sure the factoring company you choose is professional and reputable. Different companies are best suited to different industries and businesses, so it is crucial that you take the time to research what factoring company is right for you and your business. Not all Factoring companies offer the same services and pricing, so make sure you are comparing them accurately. How to choose the right factoring company?