Benefits of Factoring

The benefits of factoring (also known as accounts receivable purchasing) are many and include the following:

• Accelerate your cash flow by receiving funding in as little as 24 hours once approved
• Faster receipt of cash enables you to more quickly pay your suppliers, take advantage of vendor discounts and improve your credit history
• Funding does not appear as debt on your balance sheet
• Access to capital without diluting your ownership position
• Can reduce overhead in collections and administration of accounts
• Based upon your customer’s credit – a big advantage if you’re a startup or experienced financial difficulties
• Your access to funding grows in parallel with your sales
• Advance credit screening of your customers can result in lower bad debt expense
• Can provide unlimited access to increased funding without lengthy approval processes required to increase a normal bank line of credit
• Expands your geographic reach – many factors can fund both domestic and international receivables

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Related Tags: small business, bank loans, factoring, accounts receivable, p.o. financing, purchase order financing, equipment leasing, working capital, cash flow