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Factoring is a quick and flexible form of financing which
substantially improves a company's cash flow. Many companies get into a cash bind by extending credit to their
customers for 30 days while having to immediately fund certain
costs, particularly payroll. This problem only gets worse as sales
grow. With factoring, your invoices are used as collateral for a
short-term loan which provides you immediate cash with which to meet
these expenses.
There are several advantages to factoring.
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Maximizes the cash available to you
Factoring provides more cash than traditional bank lines of credit.
·
No arbitrary line of credit amount
You borrow based on your sales activity so you are automatically set
up to finance your growth.
·
Cash Flow is more predictable
In addition to speeding up your cash flow, factoring also makes it
easier to manage your cash since your invoicing is more predictable
than when customer payments will be received.
·
Flexibility with your financing
Factor when you want, as much as you want, and for as long as you
want. There is no minimum factoring level or commitment to factor in
the future.
·
Improved credit evaluation
Factoring can provide credit reports and expertise in helping to
assess new customers or changes to existing ones.
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