Ozarks Capital Funding

As we’ve discussed in prior posts, invoice factoring has become an extremely popular method of acquiring working capital lately.   Working capital loans are getting harder to get because of the tight credit markets.  But the increased demand for factoring has also allowed funding sources to be more choosy about who they accept as clients.

Because many factoring companies depend on bank credit lines for their own source of capital, they are forced to find ways to mitigate their risk.   They often do this by stipulating that the client “have its act together” in regards to the way they operate.   If you are considering applying for accounts receivable factoring as a financial tool, here are some suggestions:

• Have a solid accounting system in place that generates timely and relevant financial reports
• Implement a budgeting system for both sales and expenses
• For the customers whose invoices you plan to factor, make sure they are credit-worthy
• Establish a strong internal control system, in which checks and balances are present
• If your company is a start-up, you should have a detailed business plan in place

Invoice factoring has many advantages, including the easy application process.  But if a factor detects that your firm lacks the business fundamentals to ultimately succeed, you may not qualify.

Get a Free, No-Obligation Factoring Quote.

Check out our new e-book, “Accelerate Your Cash Flow With Invoice Factoring”.  Click here.