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 One of the biggest objections I hear about accounts receivable factoring is that it is much more expensive than bank loans. When I hear this complaint, my initial response is to tell them that if a bank loan provides an adequate amount of working capital for their needs, they should go that route. But if the bank rejects their application for financing, they should keep an open mind about invoice factoring.
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Written by Kent Harlan, CPA
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 It was bound to happen. The years of poor underwriting standards in which anyone with a pulse could get a home loan have caught up with the credit markets. The repercussions have spread through all facets of the lending industry, making it difficult for even credit-worthy companies to get business lines of credit. With invoice factoring, a company can get the working capital it needs to either survive or grow. |
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Written by Kent Harlan, CPA
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 One of the biggest challenges for an operator of a temporary staffing company is maintaining an adequate amount of working capital. At the risk of oversimplifying the situation, cash goes out quicker that it comes in. Invoice factoring is a great solution for temporary staffing companies with cash flow issues.
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Written by Kent Harlan, CPA
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 The economy, which has been on a four year growth cycle, is softening. Some economists are predicting a recession in the near future. This will affect the cash flow of many companies large and small. Receivables factoring can be a valuable financial tool to help weather the storm, but consistent monitoring and performance improvements are critical to the effort.
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Written by Kent Harlan, CPA
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 You need to set up an invoice factoring program because you've received a new contract for services, which requires cash to pay suppliers, employees, and additional expenses. You could probably pledge personal or corporate assets to get a bank loan, but you're hesitant to go that route. First, it takes time you can't afford to get the loan in front of a committee and to get it closed. You are also leery about tying up personal or business assets to get working capital. |
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