Accounts receivable factoring, sometimes known as factoring and invoice discounting bills is more and more for a company to raise additional working capital required for expansion or operational. East-factoring right for your company?
For factor or not factor?
The purchase of accounts receivable (invoices) is generally known as factoring. Companies can sell their invoices to companies known as factors.
Although not all companies are familiar with factoring, historians argue that factoring dates back to ancient Roman civilization making it one of the world's oldest methods of financing.
In the past, merchants used factoring to settle their debts trade between each other. Fast-forward to today, company profiles and it is clear that factoring is still a very viable business tool for businesses all types and sizes.
Then factoring in your company? Consider the following advantages:
* Factoring provides a company with working capital, thus increasing their cash.
* Factoring has no limits, offers quick results and it is accessible and flexibility.
* Factoring stimulates growth and expansion can be financed without debt.
* Factoring can increase production and sales.
* Factoring is not a loan service, it is rather seen as a promotion purchase.
The factors are not normally charge interest, they simply buy the invoices from businesses at a discount and collect a fee.
Do not confuse the purchase invoices in the form of loan. Many small and medium enterprises which introduce a bank loan application are generally rejected.
The banks estimate the amount of assets owned by the company in order to guarantee the loan, therefore, banks normally require a large number of guarantees in terms of business before being approved for a loan. If and when a loan is approved, it May only a small percentage of total business accounts receivable.
The factors are different, they are not subject to the same guidelines and regulations that banks are. The factors to consider the solvency of the company customers, not the credit of the company itself. The purchase of accounts receivable never creates a debt to the company, he simply gives them the opportunity to access their future money immediately.
For factor or not factor?
The purchase of accounts receivable (invoices) is generally known as factoring. Companies can sell their invoices to companies known as factors.
Although not all companies are familiar with factoring, historians argue that factoring dates back to ancient Roman civilization making it one of the world's oldest methods of financing.
In the past, merchants used factoring to settle their debts trade between each other. Fast-forward to today, company profiles and it is clear that factoring is still a very viable business tool for businesses all types and sizes.
Then factoring in your company? Consider the following advantages:
* Factoring provides a company with working capital, thus increasing their cash.
* Factoring has no limits, offers quick results and it is accessible and flexibility.
* Factoring stimulates growth and expansion can be financed without debt.
* Factoring can increase production and sales.
* Factoring is not a loan service, it is rather seen as a promotion purchase.
The factors are not normally charge interest, they simply buy the invoices from businesses at a discount and collect a fee.
Do not confuse the purchase invoices in the form of loan. Many small and medium enterprises which introduce a bank loan application are generally rejected.
The banks estimate the amount of assets owned by the company in order to guarantee the loan, therefore, banks normally require a large number of guarantees in terms of business before being approved for a loan. If and when a loan is approved, it May only a small percentage of total business accounts receivable.
The factors are different, they are not subject to the same guidelines and regulations that banks are. The factors to consider the solvency of the company customers, not the credit of the company itself. The purchase of accounts receivable never creates a debt to the company, he simply gives them the opportunity to access their future money immediately.
