FACTORING
General Benefits of Factoring
Factoring is a flexible financial solution that can help your business be more competitive
while improving your cash flow, credit rating, and supplier discounts. Here are some of the
reasons why many businesses use factoring:
Offer better terms, Win more business, and be more competitive!
ACCOUNTS RECEIVABLES
A client’s ability to raise cash by factoring is based on the total accounts receivable.There is no ceiling beyond which the factor must stop providing cash. The more sales a business makes, the more cash it can draw. The factor does not concentrate on the business debt/equity ratio to provide funds, as banks do.We offer a dependable, continuing source of cash without the necessity of making separate loan applications or waiting for a loan board to grant or deny. Once we begin you may continue as needed or you may stop at anytime.
What are the benefits of factoring your income stream?
•Creates CASH flow!!!!!
•Relies on the strength of a business’s customers
•It is accessible and gets quick results.
•Creates NO debt on your balance sheet.
•Better terms on your invoices.
•You can build into your costs of goods and servicing.
•Increases your purchasing power and allows you to do
more business and even pay cash and receive additional discounts.
•Eliminates the need for bank loans or SBA Loan.
•Eliminates using equipment, real estate or inventory for collateral.
•Saves you on other business costs.
•Eliminates the need for venture capitalists or partners that share in decision-
making and profits.
•You can take advantage of supplier discounts and build your credit rating. The increased cash flow from Factoring will allow you to pay your vendors earlier or buy in larger quantities. Often times you can offset the cost of Factoring by taking advantage of supplier discounts offered when you pay faster or buy in larger quantities.
•Factor ALL of your receivables or part of your receivables.
Example: A new customer may choose to do business with your company because you can offer NET 60 or NET 90 terms even though your competitor (who isn't factoring) can only offer NET 30 terms but has a 5% better price. If you factor the subsequent invoice at a discount of 5%, you have leveraged factoring services to win the business at no extra cost and improved your cash flow at the same time.
With advanced funding you can pay your suppliers early to receive a discount on your next order and improve your overall margins.
Factoring / Accounts Receivables
