Texas Accounts Receivable Processing Companies

Written by Patricia Tunstall
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Factoring, or accounts receivable financing, is a worldwide approach to cash flow problems for many industries. Because of its utility, factoring is applicable to different businesses that require varying plans. Accounts receivable processing companies are frequently banks that have expanded their services to be of assistance to the small business owners in their region.

Banks Become Factors

The entry of the conservative banking industry into accounts receivable financing has helped to make the factoring industry more competitive. Only in the last few years have banks gained a determined foothold in factoring, and this has been beneficial for consumers. Rates, for example, have been driven down to half what they were 20 years ago.

Banks still look at the credit history of both business owners and their customers, whose invoices the banks will be buying. These traditional financial institutions still prefer solid assets as collateral: property and equipment. They have edged toward the thinking of factoring processing companies, however, and have become more comfortable with invoices as collateral.

Invoices, after all, represent cash, and if banks can help out their customers (which is always good business) and make money for themselves at the same time, this is an all-around win-win situation. Banks maintain their traditional activities of providing loans, of course, but they have branched out into factoring, which has less stringent requirements. Banks understand that business owners come to them for factoring because the businesses do not meet the standard criteria for credit from the bank. Nevertheless, banks are finding that factoring makes good business sense because it immediately benefits both the banks themselves and their customers who are in need of temporary cash.


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