By: Marty Milan

The purchasing of accounts receivable (invoices) is generally known
as factoring. Businesses can sell their invoices to companies known
as factors. Although not all business are familiar with factoring,
historians claim that factoring dates back to the ancient Roman
civilization making it one of the world’s oldest methods of finance.


In the past, merchants used factoring to settle their trade debts
among each other. Fast forward to today’s businesses profiles and it
is apparent that factoring is still a very viable business tool for
businesses all types and sizes. Can factoring work for your
business? Consider the following benefits:

-Factoring provides a company with a continuous working capital,
thus increasing their cash flow.
-Factoring has no limits, offers quick results and it’s accessible
as well as flexible.
-Factoring stimulates growth and can finance expansion without debt.

-Factoring can increase production and sales.
-Factoring is not a lending service, rather it is thought of as a
discounted purchase.

Factors do not normally charge interest, they simply buy the
businesses invoices at a discount and collect a fee. Do not confuse
the purchasing of invoices as a loan. Many small to mid-size
companies that apply for a bank loan are usually turned down. Banks
consider the amount of assets that a business has in order to secure
the loan; Therefore, banks normally require a great deal of
collateral from a business before they are approved for a loan. If
and when a loan is approved, it may only be a small percentage
of the businesses total accounts receivable.

Factors are different, they are not subject to the same guidelines
and regulations that banks are. Factors look at the credit
worthiness of the business’s customers, not the credit of the
business itself. The purchasing of accounts receivable never creates
a debt to the business it simply gives them the opportunity to
access their future money immediately.



About the author:
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However, the byline (resource box) must be left intact.

Marty Milan works with businesses to help them learn how they can
access their future money now. Aside from factoring, you can read on
various topics such as Lawsuit Funding, Structured Settlements,
Selling Your Notes and more at www.cashflowaccess.com
mailto:cashflowaccess@aol.com