Benefits of Factoring Receivables

Here are some of the main advantages of factoring receivables:

• Obtain funding for your outstanding receivables within 24 hours.
• Offer better terms to large customers and increase sales.
• Extend credit to large customers without asking for COD.
• No new debt is created. Factoring is not a loan.
• Pay your suppliers faster, take advantage of early pay discounts.
• Improve your business cash flow and credit rating.
• Eliminate long billing cycles and the hassle of collecting money.
• Instant credit guarantees for new customers.

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.

• 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.
Spend 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.

• Accelerated 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 receivables 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.