|
|
|
 Better Cash Flow
Factoring has many benefits. One of the primary benefits of factoring is better cash flow. Instead of waiting weeks or months for your customers to pay, factoring enables you to get paid within a day. Factoring benefits some businesses by allowing them to operate more on a cash sale basis. Better cash flow is possible with factoring despite your customers taking up to 30 days or longer to pay. Being in business can be like a roller coaster ride. Seasonal sales can ramp up quickly and consume lots of cash. Factoring can give you the benefit of better cash flow during a busy period. The selective use of factoring benefits business owners who wish to have more control over their cash flow. By using factoring, you can have the benefits of better cash flow and less stress.
|
|
|
Credit History
One of the benefits of factoring is how easy it can be to qualify for this form of financing. You may have had a bankruptcy or divorce in recent years. Your business may be fairly new. In short, your own credit history may be bad or non-existent. It may not matter. Your credit history has little bearing on being able to qualify for factoring. Instead, the decision is primarily based on the credit history of your best customers. That's because your customers are the ones obligated to pay the invoices you bill to them. One of the benefits of factoring is that it allows you to leverage off the good credit history of a customer that is an established company. Thus, if your business sells to some larger businesses or the government, you may be able to get the benefits of factoring, regardless of your own financial situation or credit history.
|
|
|
No Debt
The Great Recession taught most everybody to be more cautious about debt. Having no debt or less debt is much more popular now than before the housing bubble popped. People and businesses are now more reluctant to borrow. Banks are more reluctant to lend and for good reason. Carrying no debt is safer than being hobbled by it.
One of the many benefits of factoring is that it does not cause you to go into debt. Factoring is a no debt solution to a short-term cash flow problem. Instead of going into debt, factoring enables a business to convert a debt that is owed to them into cash.
For all practical purposes, factoring works like a series of loans to your business. One of the benefits of factoring though is you are not the primary party responsible for repaying the loans. Instead, your customers are obligated to pay. Assuming there are no disputes, they will typically do so within 60 days. Once they pay an invoice, the loan automatically extinguishes itself and no debt remains.
Besides no debt, one of the benefits of factoring is that the amount of credit available can grow right along with your sales. Unlike a conventional line of credit that involves going into debt, there is no arbitrary limit to the amount of cash you can get from factoring. As long as your sales are to good creditworthy companies, a factoring line of credit can grow. A factoring line of credit entails no debt and can expand almost automatically in proportion to sales.
Call 541-484-7044 for a Quote
|
|
|
|
