Factoring

Factoring offers small businesses a fast way to get cash from their accounts receivable.

• Understanding

Factoring

Why wait weeks or even months for payment on outstanding accounts when you could have cash in hand now? Factoring firms will buy your AR for cash. When your customer is ready to pay, they pay directly to the factor so you don’t have to repay the funds.

You can factor invoices, purchase orders, and contracts for immediate payment. Most factoring firms charge 5% or less to factor your accounts. Any remaining funds from your customers, after the factor is repaid, get forwarded to you. The advanced funds you get from the factoring company can go toward any business expense. Pay bills, manage payroll, or upgrade your decor when you use factoring to get cash today.

• How to effectivly use

Factoring

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Small businesses often face the problem of waiting on payment from one job to cover materials or inventory for the next. This lag can hold the business back from bidding on bigger jobs, stifling growth. Factoring the business’s AR eliminates the wait time and enables the business to bring in supplies and personnel to handle the next job faster.

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Factoring can also help cover immediate expenses, helping the business avoid late fees and other charges. While factoring isn’t a substitute for cash flow, it can be a great management tool for accelerating growth. Low fees, collection management, and payment processing make factoring an attractive financing option. Speak with your broker to find out more ways factoring can work for your small business.

Bills

While you wait 30 days or more for payments to come in, you may have to put bills on hold. If your clients are slow to pay, you could be looking at late fees and reconnection charges. Avoid the headache of overdue bills by factoring your invoices for the cash you need now.

Payroll

Your staff works hard for your small business. Don’t make them wait on payroll while you wait for your clients to satisfy their accounts. With factoring, you can get what your clients owe now, instead of delaying for weeks or months. Ask your broker to show you how factoring can work for you.

Emergencies

Emergencies can strike when we’re least prepared. Accidents, lawsuits, environmental disasters, and economic depression all require you to be on your toes. While insurance can cover some expenses, it may take weeks before you see any money. Use factoring to leverage your company’s AR and get your business back on track right away.

Advantages

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Gives you cash fast

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Doesn’t add debt

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Low fees

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No payment processing headaches

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F.A.Q’s

Q. When is factoring not a good fit?

Factoring only works when you have invoices, purchase orders, or contracts to sell to the factoring company. If you don’t have AR to sell, talk to your broker about working capital loans, hard money loans, and lines of credit.

Q. How do I find a factoring company to buy my AR?

The best way to get the highest value for your AR is to work with a broker. Our brokers can show you the best deals for the lowest rates and help you compare across factoring companies. Contact us for more information today.

Q. Do you need good credit to sell your AR assets?

No, factoring does not rely on your business’s credit score. Instead, factors use the value of your accounts and the creditworthiness of your clients to determine how much to fund.

Q. What if I need funding but can’t afford a loan?

Factoring is the sale of your AR assets, not a loan. As long as your customer pays their invoice, you don’t have to pay the money back to the factoring company. Think of it as an advance on the money you’re already owed.

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Let's Explore Your Funding Needs.

Our team is here to answer any questions and provide personalized guidance for your business’s financing needs. Whether you’re exploring options or need assistance with the application process, we’re just a message away. Reach out today and let us help you find the best financial solution for your business.