|
Benefits of Factoring
Factoring is a flexible financial solution
that can help your business be more competitive while improving
your cash flow, credit rating, and supplier discounts. Unlike
traditional bank financing, factoring relies on the financial
strength and credit worthiness of your customers, not you. You
can use factoring services as much as you want or as little as
you want. There are no obligations and no minimums. Here are the
most common reasons businesses use factoring services:
Improve cash flow without additional debt
Eliminate long billing cycles and receive cash for your
outstanding invoices in 24 hours or less. No debt is created.
Factoring is not a loan. This allows you to preserve your
financial leverage to take on new debt. Meet tax requirements on
time. Purchase capital equipment. Market for additional
business.
Offer better terms - win more business
With factoring you can attract more business by offering better
terms on your invoices. Most companies negotiate on price to win
business in a competitive market, but with factoring you can
negotiate with terms instead of price. To your customers, better
terms can be more attractive than better prices.
When using attractive terms to win business, you can build the
cost of factoring into your costs of good and services.
Example: A new customer may choose to do business with
your company because you can offer NET 30 or NET 45 terms while
your competitor (who isn't factoring) requires payment up front
but has a 3% better price. If you factor the subsequent invoice
at a discount of 3%, you have leveraged factoring services to
win the business at no extra cost and improved your cash flow at
the same time.
Customer credit services
Reduce bad debt expense. Streamline credit approvals for new
customers and improve decision-making on new business. Reduce
administration costs.
Flexibility
Factor as much as your want or as little as you want. You
decide. No obligations. Funding is based on the financial
strength of your customers.
Factoring is NOT expensive.
Read
FAQ ...
|
