What kind of Companies Factor?

Companies factor their invoices for many of reasons. It has been a major source of revenue for start up and rapid growing mature companies because it helps them manage their receivables and use the cash flow it produces to fund growth. But there are additional reasons.

A company that is not yet or no longer Bankable: It might be new, have credit or tax problems, or it might be "too thin" for consideration by conventional bankers. Factors routinely work through all of these issues to a satisfactory and economical solution for our companies of all sizes.

A company might be in or have been in Bankruptcy: Frequently a viable business, for legitimate reasons, has had to file bankruptcy. While conventional bank lenders will not consider them, factors may.

To Get Larger Contracts: By factoring their receivables, a company can purchase materials and labor necessary to perform where they might not have otherwise been able to.

To Qualify for Discounts: By purchasing in larger quantities, a company can often save enough by purchasing bulk to more than pay for the factoring cost. Include early pay options and this can wipe out all factoring cost.

To Reduce Clerical Overhead: Very simply stated, companies frequently cannot perform all the services that a factor can provide.

Direct Focus: Clients can focus on looking ahead while a factoring company manages collection.

Factoring is a simple and cost effective solution to all the above scenarios and more.

Why, then do all companies not factor? Because not all are structurally able.

Remember, Factoring is not a loan; it is actual purchasing of the client’s credit worthy invoices.

If a factoring company cannot take title to them, they will not purchase them.

Examples include UCC Filings by banks, IRS, or others which take actual title to receivables. Other examples include liens on invoices, guaranteed sales and government invoices where they reserve the "right not to pay". However UCC filings by banks and the IRS can sometimes be subordinated.

Want to speak to me personally 888-603-0055!

Get a free Factoring quote By Clicking this Link

Thanks for reading!