How to Win the Cash Game
We all agree that Cash is King for any business owner, especially entrepreneurs, start-up companies, and companies experiencing growth. But how do business owners get “Cash to be King” in their business? The solution is accounts receivable funding, commonly know as factoring.

Factoring is the most under utilized and often misunderstood form of commercial financing available to businesses. Most business owners are completely unaware of its existence. The factoring industry places approx. 80 billion dollars in the economy each year, but business owners are still unsure about using it as a funding tool.

What is Factoring?
Factoring is a way of increasing your cash on hand and improving your operational cash flow by simply exchanging your receivables for cash. Factoring is not a loan; therefore no additional debt is created. The finance company, known as the factor, purchases the receivables at a slight discount of the full face value of the invoice.

A Powerful Example
A small business owner recently expressed concerns about how fast his business was growing. He was excited about the growth but was experiencing “growing pains”. He had great clients but his invoices were outstanding for 30-45 days. He struggled to meet weekly payroll and actually had to turn business away because he couldn’t afford to cover the added payroll expense. We discussed factoring and had his account set-up in 7 days. Now as he invoices his clients, he faxes a copy to his factor who wires funds into his account within 24 hours. His cash flow has instantly improved and he has the funds available to cover payroll and take on larger clients. He explained, “I sleep better at night knowing I have money to cover payroll. I can now go after larger clients and really build my business.”

Relieve the Stress
Factoring provides the working capital to growing businesses and helps them become more successful. It is commonly used as a short-term bridge to relieve the stress related to lack of operating capital. As the business becomes more successful, most business move on to more traditional finance programs. Until then, factoring is a fast, flexible, and convenient alternative for many businesses.

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.