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 Better Cash Flow
The primary benefit of factoring is better cash flow. Instead of waiting 30 to 90 days for your customers to pay, factoring gives you the ability to get paid immediately. Factorings allows you to operate more like a COD (cash on delivery) business. You can do this while offering good payment terms to your customers, without any concern about how that will affect your cash flow. All businesses experience ups and downs. Your business may be seasonal or struggling to meet big surges in demand. Factoring can be highly beneficial under such circumstances. With factoring, you can gain some control over the cash flow of your business. By factoring invoices as needed, you can improve your cash flow and sleep better at night.
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Credit History
Your business may be able to qualify for factoring even if your credit rating is poor or non-existent. Even if you have experienced a bankruptcy you may still be able to qualify. That’s because the credit decision is based on the credit rating of your customers--- not yours. The reason is--- your customer is obligated to pay the bill---not you. Your customers may be businesses that have been around for years and have good credit scores. If your business sells to larger, credit worthy businesses or the government, you can likely qualify for factoring--- quickly and easily---regardless of your own financial standing or credit history.
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It's Not Debt
Unlike lending, factoring does not create any debt. Factoring simply converts one of your assets---invoices--- into a liquid asset---CASH. Factoring frees up working capital that is otherwise locked up in your accounts receivable.
There is no upper limit to the amount of credit (cash) you can get from factoring. As your sales and accounts receivable increase, more cash becomes available. Expansion of your initial credit line occurs almost automatically, without you having to go through all the hassle of applying again to get more credit. If your business grows beyond our capacity to service as a small factor---no problem. We maintain relationships with larger factors that can seamlessly step in to provide all the funding your growing business could ever need.
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