Factoring abc

| | | | | | | | | | | | | |

The ABCs

Businesses need money in order to operate effectively; this has always been the case and will continue to be the case in the future. Sometimes businesses need short-term or even continual funding solutions that provide quick access to cash – your business is no different. Maybe you need some quick cash to meet payroll, purchase inventory or a quick boost to your company’s working capital so that you have extra money on hand. Regardless, businesses have a number of funding solutions available to them today - business lines of credit and small business loans being only two of the many.
One of these solutions is business factoring and is an underused yet highly advantageous method of receiving financing for your business.

What is business factoring?
Business factoring, also called “invoice factoring”, allows you to take your business’ unpaid invoices and receive cash for them from a factoring company or a “factor”. Factors take your accounts receivable, review them, and upon approval, advance you a certain percentage of the overall value of your submitted invoices.
Essentially, invoice factoring services provide a fast-funding option for large and small businesses who meet certain criteria. Much unlike business loans and lines of credit, your personal and business’ credit history do not come into play, rather qualifying for business factoring relies on your monthly invoices and the credit worthiness of those to whom you extend a limited line of credit through invoicing.

How factoring works - the process
The factoring process is simple and straightforward, at least on your end. You begin by compiling and making copies of the outstanding invoices that you want funded, though you should double check to be sure that all required information and signatures are in place before handing your invoices over to the business factoring service to avoid future delays.
Once the factor has