- Factoring stimulates cash flow.
- Factoring relies on the strength of a
business's customers.
- Factoring is accessible.
- Factoring gets quick results.
- Factoring is flexible.
In many situations, factoring is
more appropriate than bank financing, because factoring:
-
Is based only on the accounts
receivable. A client’s ability to raise cash by
factoring is based on the total accounts receivable,
rather than on traditional measures of financial
strength and stability.
-
Provides continuing cash flow without
the requirement of periodic payments or interim payoffs.
New sales continuously create new power to obtain cash,
and the business does not have to deal with renewal of
loans or worry about maturity dates.
-
Gives a business increased access to
cash as sales and receivables increase. 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.
-
Offers a dependable, continuing source
of cash without the necessity of making separate loan
applications.
-
Avoids the necessity of obtaining
funds from venture capitalists, who receive an interest
in the business and generally have a say in how the
business is run.
-
Saves the business owner precious time
waiting for a loan board to grant or deny his or her
loan. Loan boards’ decisions are influenced by many
considerations, and the outcome is often unpredictable.
With factoring, periodic delays and negotiations are
eliminated, allowing the business owner time to do what
he or she does best – run the business.
-
What does it boil down to-- PEACE
OF MIND!
