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Benefits to Factoring
- Immediate cash!
Receive cash advances on qualified receivables in less than 24 to 48 hours, so you can take care of operating expenses, take supplier discounts, move forward on expansion plans, marketing campaigns, or pay other expenses.
- Tap into unlimited cash
Factoring is the only source of business financing that grows with your sales. As sales increase, more money becomes immediately available. Unlike traditional bank financing, factoring generally has no maximum limits to restrict growth.
- Unrestricted use of funds
The cash from factoring can be used for anything, its your money.
- Greater control over your cash flow
You decide exactly when and how many invoices to factor.
- Win the battle against slow-paying clients
Whether your terms are net 30, 45, 60 or even 90 days, slow paying clients can be a thing of the past.
- Attract more business by offering better credit terms to your customers
Factoring lets you offer competitive credit terms to attract more business, while avoiding a negative impact to cash flow with a continuous and immediate source of cash for all factored receivables.
- Take advantage of supplier discounts for early payment
With the cash you free up from receivables that may be 30, 60, or 90 days outstanding, you can take advantage of supplier discounts.
- Eliminate Early payment discounts
With factoring and the immediate cash it provides, you no longer need to offer your cliente early payment discounts.
- Easy process to setup
Accounts receivable financing does not require the documents that are generally needed to secure bank loans. By factoring your accounts receivable you can have almost immediate access to cash.
- Flexible contract terms
There are generally no long term or multi-year agreements in factoring, frequently there is a range of agreement term options, so factoring can be a flexible source of financing. And discontinuing a factoring agreement is uncomplicated.
- Businesses can outsource their accounts receivable management
Factoring provides your business with professional accounts receivable management, which can remove or lessen the costs associated with these activities, so you can concentrate on marketing and bringing in new customer accounts.
- Complete detailed reporting
Factoring provides businesses with complete and detailed reports about their accounts receivable portfolios.
- Avoid debt
By using your own resources (your receivables) to finance your operations, you may be able to avoid taking on more debt.
- Factoring is not a loan, there are no loan payments
You are not burdened with having to make monthly payments to repay a loan. There are no long-term obligations that appear on the balance sheet.
- No credit score required
Factoring is a form of financing that does not depend on your business’ credit rating; the factoring company focuses on the creditworthiness of your customer accounts.
- Leverage your customers’ credit
You don't need good credit or a long-term operating history use factoring services; all you need are credit-worthy customers.
- Improve your credit rating
Factoring can help protect your company’s credit rating by providing a continuous supply of cash to meet financial obligations.
- Improve your financial statement
Funding does not appear as a liability on the balance sheet.
- Little to no collateral required
Only your receivables are used as collateral when factored with a recourse factoring arrangement, so you can use other assets, such as property and equipment as collateral for other borrowing. And non-recourse terms require no collateral at all.
- Increase your purchasing power
Factoring allows you to enjoy bulk purchasing discounts or early payment discounts.
- No liabilities on your balance sheet
Factoring is not a business loan; there is no debt, and there are no long term obligations that appear on your balance sheet.
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