Factoring Loans

Are you a business owner? Do you need a line of credit in order to keep your business up and running, but a bank won't offer you the flexibility you need from line of credit? A factoring loan may be just what you are looking for. Through the sale of account receivables, you can have access to company cash within a few days of shipping invoices. This means that you don't have to wait for your clients to pay up because you can sell their receivables, at a discount, for money you can use right now for your business.

Factoring loans explained

If you've been doing any research on factoring, then the one thing you know is that factoring is not the same thing as getting a loan. Having a factor doesn't equate to having a loan at a bank, for example. In fact, most factoring companies make sure the distinction between factoring and loans is very clear.

Factoring loans, as they are sometimes called, refer to the sale of account receivables. They really aren't loans because the receivables aren't used as a form of collateral, but are sold for money. For example, let's say you are a business owner of a company. Because you do not have vast amounts of collateral, a bank won't offer you a sizeable line of credit, which is what you need to keep your business running while you wait for your customers to pay their invoices. A good solution to this dilemma, faced by many different companies, is to get a factoring loan.

Once you have sold your accounts receivable to a factoring company, that company assumes responsibility for getting payment from you clients. Your customers must pay the factoring company for the invoices, usually within a strict time frame, a fact that will be noted on their invoices.

Reasons for factoring loans
Having funds available for a company to use is vital to its success, but without collateral, you might be wondering how you can convince anyone to finance your company. Factoring loans provide you with the money you need now to sustain or build your company. For many new companies and even for established companies, having a quick turn-around on invoices is fundamental to keeping it running. Employees need to be paid, bills need to be paid, and supplies need to be purchased. A successful company cannot wait the 60 or 90 days it takes to get paid from their clients, another reason that many companies turn to factoring loans as a solution.

Advantages of factoring loans
With factoring loans, you don't have to worry about getting paid from your clients. For a small fee, you can have the assurance of knowing you will be paid swiftly after your invoices are sent to your clients and your accounts receivables turned over to a factoring company. Plus, you don't have to maintain a collection department within your own company because once your receivables are sold their collection is up to the factoring company. Perhaps the most attractive benefit of factoring loans is that they enable you to have access to cash without having to put up any collateral. For new companies, this is particularly advantageous.

Start today by contacting us here or on our toll-free number. Or apply here and get the accounts receivable funding process going today!

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