Bank Factoring

Written by Patricia Tunstall
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As more and more industries become aware of the advantages of accounts receivable factoring, this financial practice enables enterprises in many different fields to improve their cash flow and increase their working capital. The apparel and textiles industries are the traditional clients of factoring, but today, disparate trades and professions are signing up for this no-debt, cash-advance arrangement.

Industries that Factor

One of the biggest influences on this spread of factoring has been the entry of banks into accounts receivable financing. Conservative and traditional, the banking industry has been the loan entity in the financial world. Today, however, banks are reaching out to the small businesses in their regions for mutually beneficial agreements.

Aside from apparel and textiles, manufacturers and distributors of all kinds of goods are using factoring to even out their cash flow: shoes, furniture, wines, skin and nail care products, aircraft parts, and maintenance supplies. Factoring clients include installers of underground utilities, ad agencies, plastic distributors and suppliers, courier services, caterers, direct mail services, and distributors of ice. Agencies that sell home health care products use factoring, as do trucking companies, and manufacturers of swimwear, hosiery, and perfumes.

A client list of factoring businesses seems endless because it includes all types of ventures. The list ranges from distributors of gag gifts and novelty items to chemical supply and manufacturing firms, from rental agencies to security staffing firms. Texas bank factoring is a prime example of the geographic spread of this financial system.

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