Factoring: The Inexpensive Alternative for Financing Your Business
If you own a business – large or small – you need to know about the fast and convenient alternative to business financing or loans from a bank: factoring. Sometimes known as invoice factoring or accounts receivable factoring, this service involves giving any or all of your invoices to a factoring company who purchases your invoices at a small discount, so you receive immediate cash. Many times a factoring company will take on the credit risk of collecting on the invoice. Whether your company is just starting out or you have been in business for a while, you can use factoring as an inexpensive financial tool to relieve cash flow pressure caused by slow paying customers. Instead of waiting weeks or months to be paid for your invoices on products you’ve already delivered or services you’ve already performed, you receive cash in as little as just a few days. Some of the major benefits of factoring include: - No upfront fees – This is not a loan, so there’s nothing to pay back, no monthly