subject: Top 5 Reasons Why Business Needs Accounts Receivable Factoring & Business Factoring [print this page] In general, you should only factor if you like having greater control of your business, having more money to work with and reaching your goals sooner. As youll see below, Business Factoring and Accounts Receivable Factoring offers you financial access and flexibility well beyond what you could get at a typical bank. Of course, it also facilitates to expand and enhance the benefits of factoring even farther. Just look at some of the advantages.
1) You dont tie up your companys equity.
With Business factoring you are not borrowing money, you are selling an asset. Other types of financing lock up your assets, while factoring frees them up to work harder for you.
2) Immediate cash flow expands your business options.
With Accounts Receivable Factoringnow you can jump on growth opportunities as they appear. Take advantage of cash discounts, do opportunistic advertising, staff up, expand inventory or infrastructure, all while comfortably meeting payroll, paying taxes, rent, insurance and equipment payments and keeping your suppliers paid on time.
3) Improving customer service is easy.
Factoring allows you to offer your customers more generous credit terms without affecting your cash flow. Make it simpler for them to work with you, and theyll reward you with more orders.
4) You can avoid financial partnerships that take away your control.
Its your business and you ought to have the final say on how things get done. Factoring keeps you out of equity sharing partnerships with venture capitalists you might otherwise need to keep your company on its financial course.
5) Your credit will improve.
You incur no debt with factoring. So your balance sheet looks a lot healthier and your payment capabilities are much stronger. Now if you want to find additional types of financing, you can negotiate from a position of greater credibility and power.
