Monday, August 20, 2007

Wall Street Journal Highlights Factoring

In today's special Small Business section, Richard Gibson of The Wall Street Journal writes about factoring in an article entitled Fast Money.

Gibson focused on a lot of the same points about factoring that you've been reading about right here...
  • Factoring of invoices is a great tool for businesses that need a lot of money and fast.

  • Factoring is a great tool for companies that don't qualify for bank financing because they've been in business for a very short period of time or the business has flaws in its credit profile.

  • Paying the higher cost of factoring is often preferable to selling a part of the company.

  • Factoring of invoices is easier to obtain than bank financing and is considered by some to be less intrusive.

  • A factor can save a company the overhead cost of internal staffing for credit screening and bill collection.

  • The cost of factoring can be reduced by using the cash flow to take advantage of early pay discounts offered by one's own vendors.

Also pointed out in The Wall Street Journal article, not all factors are alike. Ask around, check references and negotiate for the best rate.

Need help finding the source of factoring? Read "Matchmaking for Business Loans" and give me a call!

Tags : factoring , accounts receivable , Wall Street Journal , working capital , cash flow

No comments: