Houston Receivables Financing

Written by Patricia Tunstall
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The essential elements of factoring go back thousands of years, and the North American factoring industry reaches back to colonial America. Despite this long and respectable history, the idea persists that factoring is exclusively used by businesses that are in trouble. While this can be the case, a temporary cash flow problem is too common in the business world to be an indication of failure.

Factoring as a Resource

Just as likely, factoring by a particular business means that the business is growing beyond the capacity of its cash flow, a problem worth having if the situation can be properly managed. Indeed, growth potential is one of the signs factoring banks look for in clients. This situation calls for professional assistance and direction, and that can be provided by factoring services.

This is another instance in which banks becoming factors has helped factoring services to spread throughout various fields and throughout the United States. Houston receivables financing exemplifies the reach of the factoring industry in today's business world. As more and more banks offer factoring services, smaller businesses are able to use these services that used to be reserved for large corporations.

Although banks are certainly aware that their accounts receivable factoring customers probably do not meet their criteria for loans, banks also realize that factoring is an invaluable resource for their customers. Businesses that are taking off and growing rapidly might not be able to muster enough cash on occasion, but they may be solid businesses that just need to control their accounts receivable and control their cash flow so they can finance their growth. Factoring then becomes a financial resource for these businesses with potential to overcome a temporary obstacle.

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