Account Receivable Factor

 









































 

 

An Account Receivable Factor can help those firms that banks often find difficult to approve such as start-up companies whose growth outstrips cash.  The primary focus in a Account Receivable Factor relationshipis the credit-worthiness of the customers being invoiced and the client’s ability to produce a quality product or service.   Simply put, if the business has an acceptable product or service that it provides to a creditworthy customer then the business is a candidate for factoring.

 


http://www.accountfactoring.org/

http://www.smallbusinessbankloan.org/

An Account Receivable Factor  provides one of the most flexible financing options and the only one that can continually grow with your company. You are not totally limited to pre-approved credit lines, and you do not have to go through a complicated and redundant application process as your business grows



http://www.accountreceivablesfunding.org/

http://www.accountreceivablesfinancing.com/
http://www.accountreceivableservices.org/
http://www.accountreceivables.net/  
http://www.accountreceivablemanagement.org/
http://www.accountreceivablefactoringcompany.org/

 

Each account receivable factor operates slightly different.  It is important to understand which programs  provide the greatest benefits and at the least cost. Several criteria should be addressed  when searching for a reputable account receivable factor.   Are there setup fees, maintenance fees or penalty fees? Is there a long term contract? Are there monthly minimums? Does the account receivable factor provide credit and collection services at no additional charge? What accounting reports will the account receivable factor supply?  What value-added services does it provide? 

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Factoring vs. Bank Loans

So, why not simply go over to the friendly banker for a loan to alleviate cash flow problems? A loan can be difficult if not impossible to receive, especially for a young, high-growth operation, because bankers are not expected to decrease lending restrictions soon. The relationships between businesses and their bankers are not as strong or as dependable as they used to be.

The impact of a loan is much different than that of the factoring process on a business. A loan places a debt on your business balance sheet, which costs you interest. By contrast, factoring puts money in the bank without the creation of any obligation. Frequently, the factoring discount will be less than the current loan interest rate.

Loans are largely dependent on the borrower's financial soundness, whereas factoring is more interested in the soundness of the client's customers and not the client's business itself. This is a real plus for new businesses without established track records.