Factoring Accounts Receivable - an amount owed by an account debtor by the act of granting short term unsecured credit in lieu of cash for goods or services. Considered a liquid asset on the balance sheet and generally expected to be paid in less than ninety days.

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Benefits of Factoring Receivables

Invoice Factoring BenefitsFactoring is on the simplest financial services available to ease your cash flow burden. By expanding your cash flow, your business will become more nimble and able to take advantage of business opportunities. Not only will factoring improve your cash flow and help your credit rating, but it will also allow you to take advange of vendor discounts and allievate the hassels of collection. Because factoring relies on the strength and creditworthiness of your customers, factoring companies do not need to probe into your finances like a bank to approve your funding. The best part about factoring is that is is so simple and easy to apply.

Customized Factoring Program

  • You decide the level of funding that you want.
  • The advance rate is determined by the credit worthiness of the customers.
  • Increase your credit line as your sales grow.

Factoring as a Negotiating Tool!

  • If you're trying to win business away from your competitors Factoring can give you that extra edge that you need to stay competitive in the marketplace. Imagine your prices are neck and neck with a competitor but you are able to offer more attractive payment terms. The odds are you would win the business in this situtation. This is a great negotiating tool.
  • Instead of dealing with cost cutting, factoring enables you to turn the tables in negotiations whereby you negotiate over payment terms. You will be pleasantly surprised when you realize how much your customers value longer payment terms.
  • Build the cost of factoring into your quotes. The customer won't even realize he is paying for the factoring. This helps keep your margins intact.

Scenario: You offer your Customer NET 60 or NET 90 terms even and your competitor (who isn't factoring) offers your customer NET 30, but has a 5% better price. Even if you factor this invoice with a 5% discount, you not only won the business, but you also did so without incurring any additional costs not to mention the positive effect on cash flow and margins.

Establish Credit with Suppliers

  • By paying your suppliers on time, you become a good customer that may lead to more favorable prices and an extention of credit from the supplier.
  • In some instances the cost of factoring your receivables is less than the volume discounts that you can obtain from your suppliers. Why not take advantage of supplier discounts if they are offered.

Stop Wasting time with Collections

  • The Factoring company doubles as you Accounts Receivable and Collections department, which will save you valuable time and resources processing the invoices and collecting payments.
  • The Factor company is your watchdog assuring you of a high credit quality customer base and eliminating the hassels of collection.

Leverage your Balance Sheet

  • Since factoring is not a loan but rather a purchase of accounts receivables, it doesn't count as debt against your balance sheet. This will still allow you to seek bank financing or leasing as an option in order to grow your business.

Factor Now!