The answer is simple. Every successful business needs working capital, commonly known as cash. The answer may be simple, but gaining access to working capital is often a challenge. Receivable funding, know as factoring, can be an excellent solution to the cash dilemma for many business owners.
Factoring is one of the most underutilized forms of commercial financing available. In fact, many business owners have never heard of factoring, which can instantly improve cash flow by simply exchanging receivables for cash. There is no upper limit or “cap” on the amount of funds you can receive. As your receivables grow, so do your available funds.
To help you better understand the role of a factoring company and how it can benefit your business, we have listed the Top 10 Reasons to Considering Factoring:
1. Your start up company has no credit history: Factoring can offer financing when you have creditworthy customers.
2. Your young company does not have 2 to 3 years of tax returns showing profitability: Use a factor to increase sales and start showing profit.
3. Your company is growing very fast, but the bank doesn’t feel comfortable extending your line of credit: A factor can work with the bank and supplement cash flow.
4. Your financing needs are for a short-term contract: Use a factor to bridge that gap.
5. You deal in large dollar transactions with high margins: Getting access to your capital will increase sales.
6. Your company experiences seasonal demands: Factoring provides capital to meet demand.
7. Accelerate customer payments by using a factor.
8. Payroll demands cause a “cash crunch”: Factoring can alleviate the problem.
9. Factoring is not a loan; therefore, no additional debt is created, resulting in strengthened financials.
10. Unfortunate events such as a bankruptcy, judgments, or tax liens will not disqualify you.
The Factoring Alliance LLC provides factoring services to small businesses and start-up companies. Please contact Kim Deveney at 888-493-3666 kim@thefactoringalliance.com for more information.
Tags: Kansas City, small business, success, sucess in small businesses