Benefits of Factoring
A Powerful Cash Flow Management Tool Used to Grow Businesses Worldwide
Easy Application...Fast Funding
With factoring, you can receive advances against your invoices to use to make payroll, pay suppliers, purchase inventory, and expand your business. Factoring can also allow you to offer the credit limits that many larger customers demand, without having to worry about interruptions to your company’s cash flow. Additionally, factoring can allow you to take advantage of trade discounts, as well as meet trade obligations and other expenses.
How Your Business Benefits
- IT'S NOT A LOAN: Many business owners are concerned that factoring their invoices will mean getting a bad credit score. Fortunately, one of the major characteristics of factoring is that it isn’t a loan, so this type of financing won’t show up on the balance sheet as debt.
- SHORTENS COLLECTION CYCLES: Factoring shortens the cash collection cycle and provides swift realization of cash by selling your receivables to a factor. Availability of liquid cash sometimes becomes a deciding factor for grabbing an opportunity or losing it.
- FAST FUNDING: Factors provide funds more rapidly than banks. Factoring companies offer quicker application, minimal documentation and swifter realization of funds as compared to other financial institutions.
- CUSTOMER CREDIT ANALYSIS: Factors provide valuable advice and insights to the seller regarding the credit strength of the party from whom receivables are pending. It helps in negotiating better terms between the parties in future contracts.
- NO ADDITIONAL COLLATERAL REQUIRED: The factor's advances are extended on the basis of the strength of accounts receivables and customer creditworthiness. Unlike traditional loans, factors do not require any additional collateral to be pledged/hypothecated. This makes factoring perfect for new businesses and startups who can easily qualify for factoring advances.
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