Today's banking environment has created a plus for the concept of small business factoring, mainly because it is a cost effective solution to obtain necessary working capital for them to sustain and grow. When a business owner gets cash from factoring invoices it can be used as a short term working capital funding source. There are many reasons why a businesses should consider factoring, also known as accounts receivable factoring, but primarily if they are in a business where they experience a slow accounts receivable cycle -- 60 or 90 days - or if the business is recovering from some unforeseen circumstance such as a loss due to a natural disaster.
Many businesses today are having a hard time keeping up with their bills, and some are just eeking by to meet payroll every month. Factoring is a great way to secure money as a business gets clients, makes money and grows. It is safe. You can continue doing business, buy more supplies in order to continue to do more business. Plus it is a smarter solution than going into debt via a bank loan, if you can even get one today given current economic conditions with banks less likely open new lines of credit or increase current credit limits. The bottom line. Factoring support business growth.
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