Receivable Factoring

Are you trying to fund your business venture but can't get a loan from a bank? Or perhaps you are looking for a way to get money for your company's account receivables sooner than the 30 days printed on the invoice? It may seem like an impossibility, but funding alternatives exist for companies that do not qualify for bank funding, or do not want the hassle of paperwork and debt. The solution you are looking for is called receivables factoring, a creative financing option that has been used for thousands of years.

Receivables factoring explained
Account receivables factoring, or simply factoring, as it is often referred to, is a type of non-traditional financing that many companies use in order to gain fast access to an immediate cash flow. Without cash, your company will not last very long, and sometimes the 30 or 60 day wait on shipped invoices is just too long. With receivables factoring, you can have money within as little as a few days of shipping your product.

When you enter into an account receivables factoring contract with a factoring company, you are basically selling your account receivables for cash. For example, when you sell product, your customers receive an invoice for the amount of product purchased. These unpaid invoices can be sold to a factoring company who will pay you cash. They use the account receivables as collateral, and then issue you a large percentage of the receivables. You can often trade your receives for up to 80 or 90% of the total. With access to this money, you can stay on top of your bills, and take advantage of discounted offers from suppliers.

Costs of receivables factoring

Receivables factoring will cost you a nominal fee for the sale of unpaid invoices for cash. However, this percentage is often negligible compared to the amount of money you can save in the long run. And for new companies just getting started, a small fee in return for a guaranteed cash flow is well worth every dime spent.

The costs associated with receivables factoring depends largely upon your company's specifics. For example, small invoices may cost as much in fees as large invoices, so it is in your best interest to turn as many receivables over to your factor as possible. Plus, your company gets to benefit from interest free financing for the time between when you sell your receivables for cash and your customers pay their invoices.

Additional factoring benefits
Receivables factoring has many benefits, in addition to supplying your company with much needed capital. First of all, you get funding that comes with flexibility, something that you won't find with a bank. Moreover, when you have cash to play with, your company can grow. Suppliers may offer discounted rates to you if you have the money to pay up front. With receivables factoring, you can always have the assurance of knowing you have money to bargain with. In addition, you can also have the additional security of knowing that your customers are credit-worthy. A factoring company will take charge of invoice payment collection so that you don't have to fret about invoice payment.

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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