Authored by Phil Cohen
As a small business owner, you may be considering accounts receivable factoring. There are three things you should know before starting the process. This blog details how accounts receivable factoring can impact your company’s finances.
Increase Cash Flow with Factoring
With factoring, a business owner sells accounts receivable invoices to a factoring company and the factoring company then takes over collecting payment from the clients. The factor will advance the business owner cash up to 90% of the invoice total and place the remaining funds in a reserve account. After the clients pay, the factor will release the rest of the money, minus a small fee. You can increase your cash flow with factoring so you can grow your business or make needed purchases.
Factoring is Debt-Free Financing
Factoring is a cash advance on your own money, so it is debt-free financing. Unlike a traditional bank loan, the money with factoring comes from work your company has completed. You will not accrue interest with factoring. There is unlimited funding potential with factoring. Your access to working capital will increase as your sales increase.
Straightforward Process
The application process for factoring is simple. Factoring does not consider your credit history for approval. Instead of filling out lengthy forms and providing detailed information, the factoring application is easy to understand and needs minimal documentation. Factors usually make an approval decision within 3-5 days and business owners usually receive cash within 24 hours after approval.
Get In Touch with Factor Finders
As a factor broker, Factor Finders can match you with a factoring company from our network. Contact us now to speak with one of our expert team members. We will respond within minutes.