is selling the interest in your receivables or invoices to a factor
at a small discount. Sometimes factoring is called "receivables
financing". Factoring provides over 100 billion dollars to industry
each year. In fact, it is an old financial service used by multi-billion
dollar corporations that is now available to smaller sized businesses
to which banks are reluctant to lend funds. Factoring is filling
a tremendous void that banks have created.
a company sells its accounts receivable (invoices), representing
money due from its customers to a factoring company, at a discount
from face value so that it does not have to wait the normal 30-45
days for its invoices to be paid. In short, factoring helps a
company speed up its cash flow, thereby enabling it to more readily
pay its current obligations and grow.
new and growing companies have trouble obtaining traditional bank
financing due to their length of time in business, profitability
or financial strength. Factoring allows these companies to convert
their accounts receivable into instant cash. Once you have delivered
your product or service and generated an approved invoice, you
can get your money in as little as 24 hrs. Factoring can help
a company stay current with its vendors and other financial obligations
such as payroll and taxes.
types of financing generally require two years in business and
showing a profit. Factoring does not have this limitation. Young,
growing companies or those with tax liens and even bankruptcy
can still qualify for accounts receivable purchasing lines.
here to fill out a Client Profile and start getting your cash