I’ve been a believer of invoice factoring for many years. That’s why it’s one of the main services we offer and promote. Sure, it’s admittedly more expensive that other types of financing, but it can provide a constant flow of working capital for your business. Unlike bank lines of credit, which are usually fixed in nature, factoring lines are limited only by the company’s pool of receivables.
Many business owners get hung up on the amount of factoring fees they’re charged. A better way to approach the issue is how much money they may be losing by NOT factoring. A growing business needs consistent working capital to complete orders on time or service new contracts. It’s hard to “go back to the well” and get approved for an increased line from the bank, especially these days. Accounts receivable factoring has no such limitations. So the real question is how much will the company lose by not having the available cash flow to grow? More than likely it will be much greater than the factoring fees charged.
Opportunity cost, or the loss of incremental profits by being cash-strapped, is a real concern for many businesses. This is especially true these days, when even successful businesses have a hard time getting adequate financing from a bank. Invoice factoring can help provide peace of mind for business owners and executives.
Get a free, no-obligation factoring quote by clicking here or call us at (417) 849-7394.
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1 response so far ↓
1 Business Money Today // Mar 18, 2009 at 4:19 pm
To add a note: Over the last few months – business owners of growing firms have had to resort back to bootstrapping efforts as banks have been unwilling to lend. When this happens, credit histories (scores) tend to slide a bit – all the while nearly all financing options are requiring higher scores or better credit. One of the good things about A/R factoring is that your credit is just a side note – more emphasis is placed on the credit worthiness or your customer. If your customer is not credit worthy – you should not be giving trade credit to them in the first place.
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