of Factoring Receivables
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.
decide the level of funding that you want.
advance rate is determined by the credit worthiness of the customers.
your credit line as your sales grow.
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.
the cost of factoring into your quotes. The customer won't even
realize he is paying for the factoring. This helps keep your margins
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.
Credit with Suppliers
paying your suppliers on time, you become a good customer that
may lead to more favorable prices and an extention of credit from
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.
Wasting time with Collections
Factoring company doubles as you Accounts Receivable and Collections
department, which will save you valuable time and resources processing
the invoices and collecting payments.
Factor company is your watchdog assuring you of a high credit
quality customer base and eliminating the hassels of collection.
your Balance Sheet
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.