Factoring Benefits Manufacturing Companies
Factor Finders’ accounts receivable factoring services recently helped the leaders of a manufacturing company through a recent cash flow problem. The president and his CEO had already ruled out non-financing options such as shortening the length of time customers have to pay their invoices or extending the time taken to pay suppliers.
The CEO did not want customers to feel undervalued and seek competitor’s services. He also sensed suppliers should not be penalized for his company’s shortage of working capital. Suppliers served as partners in producing inventory and providing value-added service. They did not require payment on in-house inventory until it was sold for finished products, thus increasing the company’s cash flow.
Factoring Helps Manufacturing Company Overcomes Cash Shortage
The business leader requested information about financing solutions from Factor Finders. He knew a traditional line of credit from a bank would require a lengthy review process, proof of financial stability, collateral in the form of hard assets, and other high fees.
Factor Finders offered the company accounts receivable financing that enabled it to serve new customers and sustain growth while paying suppliers on regular terms. Accounts receivable financing or factoring allows companies to convert their invoices into cash.
Many accounts receivable finance companies specialize in providing funds to small- or mid-sized customers as opposed to the large corporate customers preferred by most banks. Most factors do not have minimum or maximum monthly sales volume requirements. Some only factor receivables for certain industries in order to provide the expertise these niche markets require.