Benefits
of Factoring Receivables
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, no minimums, and no
maximums. Here are the most common reasons businesses use Factoring
services:
Offer better terms
to win more business.
Be more competitive!
-
With Factoring you can attract more business by offering better
terms in 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 60 or NET 90 terms even though your competitor
(who isn't factoring) can only offer NET 30 terms but has a 5% better
price. If you factor the subsequent invoice at a discount of 5%,
you have leveraged factoring services to win the business at no
extra cost and improved your cash flow at the same time. With advanced
funding you can pay your suppliers early to receive a discount on
your next order and improve your overall margins.
Improve
cash flow without additional debt.
- Eliminate
long billing cycles. Receive cash for your outstanding invoices
in 24 hours or less
- No
new debt is created. Factoring is not a loan.
This allows you to preserve your financial leverage to take on
new debt.
Spend
more time building your business.
Less time collecting money.
The Factor assumes the responsibility and risk of collecting payment.
The Factor does most of the work processing invoices, saving you
time.
Take
advantage of supplier discounts.
Build your credit rating.
- The
increased cash flow from Factoring will allow you to pay your
vendors earlier or buy in larger quantities.
- Often
times you can offset the cost of Factoring by taking advantage
of supplier discounts offered when you pay faster or buy in larger
quantities.
Flexibility
Factor as much as your want or as little as you want. You decide.
No obligations. No binding contracts.
There are No minimums and No maximums in the amount you can factor.
Funding is based on the strength of your customers.
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