About Factoring
July 18th, 2007 Filed Under Factoring
Accounts Receivable Factoring is simply the selling of a business-to-business invoice that is due to be paid in the future for immediate cash and provides an unlimited line of credit for business-to-business companies.
Factoring does not require you to pledge any personal or business assets as collateral, and you do not need an audited financial statement to qualify. Accounts Receivable Financing is well suited for businesses with poor credit or bankruptcy because the emphasis is placed on the credit worthiness of the business’s customers, not the business itself.
Accounts Receivable Factoring will greatly improve the cash flow of your business and provide the means for your business to thrive and grow while not incurring additional debt in the process.
Some of the benefits of Accounts Receivable Factoring:
- Receivables Factoring enables you to manage your working capital
- Receivables Factoring is a unlimited line of credit
- Provides a non-debt financing solution
- Receivables Factoring will help you stabilize cash flow and expand your business
Why do business Sell their Invoices
There are many different reasons why businesses sell their business-to-business invoices. Commonly, business’s that participate in a receivable financing program can not wait the typical 30 or more days to receive payment on their invoices because they:
- Are expanding business faster than their cash flow permits.
- Need cash to increase production or sales.
- Need cash to take on new business, purchase equipment or inventory.
- Need cash to take trade discounts.
- Need to pay vendors and creditors.
- Need cash to meet payroll or tax payments.
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