Factoring
Factoring - Its Benefits
Most Businesses owners have never considered using a Factor instead of going for a Loan. Yet they have lots of outstanding receivables that if turned into cash they will have no need to borrow.
Some Factors promise cash in as quick a time as 24 hours. They can advance as little as $20,000.00 or as much as $5,000,000.00. Certainly there are times in the life of most businesses where cash flow gets a bit stretched.
That is where LoansAndFactoring.com can be of most help to you. Factoring is much easier than a bank loan: all one has to do is to sell receivables for immediate cash. There are no long term contracts and it can be repeated as often as is necessary.
There are different terms for Factoring; terms such as Invoice Factoring or Accounts Receivable Factoring they all work the same way. Sell your collectibles for cash now. No debt is added to your books, no long term contracts, and the money is delivered quickly. No bank can compete with that.
Added to that mix you can also apply for an Asset Based Loan. This is more or less offered to larger well established firms, while factoring is usually used by younger, smaller or startup firms. What is available to you? What can you obtain by way of financing for your particular set of circumstances? Nothing is written in stone and while one bank or lender would not be willing to accept your loan application, that is by no means representative of all lenders.
One of the key benefits of utilizing factoring services is the expedited access to capital. Instead of waiting for weeks or even months to receive payments from customers, businesses can sell their outstanding invoices to a factoring company at a discounted rate. This immediate access to a significant portion of their accounts receivable helps alleviate the strain of delayed payments and assists in meeting immediate financial obligations.
By exploring alternative financing options such as factoring, small businesses can effectively steer clear of debt accumulation and attain much-needed liquidity. Unlike traditional loans, factoring empowers businesses to access immediate cash flow by leveraging their outstanding invoices. This innovative solution eliminates the necessity of incurring debt or being entangled in the complexities of regular loan repayments.
Differences between Factoring and Asset Based Loans
For most Business owners seeking an injection of cash; a loan is a loan. However what many miss is that there are other ways to obtain fast cash for their business. Two quick ways are Asset Based Loans, and Factoring. They both can look and behave similarly because both programs can provide similar benefits. However, there are important differences one from the other.
What is factoring?
Today we will look at Factoring; the one lest knowledgeable about. Invoice factoring is a type of business financing in which a factoring company purchases accounts receivable in exchange for an immediate payment. This payment provides liquidity to the client. Factoring helps companies that have cash flow problems because they cannot wait the usual 30 to 90 days for customers to pay invoices.
While factoring transactions can resemble the function of a line of credit, they are often structured as an actual sale. The finance company purchases each invoice through a purchase and sale agreement. As part of the purchasing process, the finance company informs the payer of the purchase and then verifies the accuracy of the invoice.
What’s the difference? Generally factoring is offered to newer companies that might be having problems obtaining funds from a bank. On the other hand Asset Based Loans are offered to older companies with a more proven track record. Even if they too might be having problems qualifying for a bank loan they are considered a more safer risk than the newer company.
Our Area of Operation
Where do we work? Around the state, accross the country and even around the entire Globe. In any country where US relations are accepted there we would welcome loans.