Invoice Factoring Provides Financial Relief
When times are tough, many small business turn to invoice factoring as a financial resource. It’s a smart financial vehicle that has been used for thousands of years. In fact, invioce factoring is one of the oldest forms of business financing in the world.
There are many advantages to invoice factoring as opposed to traditional bank loans.
When you factor invoices, it’s not a loan that you have to pay back or that accumulates interest over time.Â Let’s be clear: Factoring isÂ not a loan, but a cash advance Â on your company’s account receivables –Â before the company pays.
This makes it the perfect financial vehicle for start ups or existing businesses that need a little cash, but don’t want to take out an expensive and time consuming loan. As long as you have invoices, you can factor them.
Plus,Â there is no long-term commitment or complicated repayment plans with factoring; that’s not the case with bank loans and lines of credit.Â
You’re able to factor cash when youÂ need it, such as during the holidays when it may be more difficult to collect account receivables or during an expansion.
Factoring has existed for thousands of years. It is used by major companies, particularly retailers. They use it to stock store shelves and advance funds on seasonal merchandise before it’s sold. Retailers such as Wal-Mart and Kohl’s now offer factoring programs to their suppliers.
Factoring is used by major companies such as Dunkin Donuts and major retailers.