Why are the factoring business accounts receivable so popular now? Who did it, why did they do it and when was the best time to explore the factoring agreement receivable receivables? The main reason for the popularity of factoring is an economic cycle that has business experience.
When the economic cycle changed down and the bank tightened credit, loans became difficult to obtain as in my case during the 2008-2009 global recession. In these difficult times, factoring companies have filled out needs by offering capital efforts needed to keep their doors open, and even to grow and develop.
Factoring has become a major alternative financial strategy for many small businesses today. In fact, many small businesses now prefer to factoring the application of loans with banks and small business administration (SBA), which often has a more stringent and more processing process.
It is also much faster to access capital when doing factoring as opposed to a long and painful process to get a loan. What are the more common companies interesting in factoring business receivables?
Truck factor factor company to cover wages and salaries for the driver. The employment agent of their invoice factor so they can pay their count / staff. In factoring medical receivables, which are a very specialized niche, medical companies receivable factors owe them by insurance companies and even the government to fund their daily needs (expenses) in the short term.
Business of all sizes also pursued accounts receivable companies because these companies also often offer refinancing purchase orders, working capital credit lines, growth or expansion funds, inventory financing and other types of loan assets by promising their physical assets.
Here is the answer to three common questions that must go through your mind now:
Why do you have to take into account?
Simple. It’s easier, faster and in many cases it can be cheaper. After you are accepted or have a relationship with the factoring company, the solid receivable receivable, you basically have a credit path rolling with them. Think about it, if a company factor your invoice has ever been, chances are they will do it again, and again, and again. They win, and the most important thing you win.
This is another. You no longer need to worry about who will process trade accounts on your business. When you factor, you basically charge all functions. Let them worry when you are worried about growing your business!
What is the size of a business that can be considered?
Whatever is good. But the factor of the most common receivables with small businesses to medium because large companies have a source of capital or their own alternative funding. The answer is actually simpler than that. If you have accounts receivable, you can with sure factors.
When do you have to consider factoring of business accounts receivable?
Do you need cash to grow and expand your business? Do you need funds to run your daily operations? Whos not?
Do you experience problems or don’t want to get a business loan or SBA? If you answer yes to these questions and you feel ready to take the next step in your business, then you should consider factoring receivables.