Factoring Services

New and growing businesses may choose factoring services to solve cash flow problems. This financing solution is very quick and dependable since the amount of the cash advance is a percentage of already booked sales. Lenders usually will advance 70 to 90 percent of submitted invoices. Choosing when and how many invoices to submit is a decision made entirely by each individual business.

Advantages of Factoring Services

The factoring industry is large and reliable. Many billion dollar corporations have used this financial solution for many years. More recently, small and medium-sized businesses have been allowed to participate. Factoring is not considered a loan. Therefore, no new debt is created and credit ratings are not affected. New and struggling businesses often have trouble obtaining traditional bank loans. Factoring does not exclude businesses with weak credit. Instead, it relies on evaluation of their customers' credit worthiness.

The fees paid for factoring services are reasonable. Often, businesses make more money by factoring. When they use the cash they receive early to pay their suppliers, they often receive early pay discounts on their next orders. This financial solution strengthens the ability to attract customers. When a business knows it will receive payment early, it can offer more attractive payment terms. NET 60 or NET 90 day terms will often close the deal, even against competitors with a cheaper price.

Another advantage of factoring is saving time. With factoring services, the factor collects the payments and assumes the risk of non-payment. Invoice processing is greatly reduced. Long billing cycles are eliminated, improving cash flow and encouraging growth and profitability.