Again and Again
for Their Invoice Factoring
How Does Invoice
1. What is invoice factoring?
of converting a company’s accounts
receivable into cash by selling invoices
to a factoring company at a discount.
Invoice Factoring is
a valuable financing option for companies
who are just starting out or who
are experiencing a period of rapid growth.
Because invoice factoring
companies rely on being paid by your customers,
your own financial history does not have
any bearing on your qualification.
Most importantly, invoice
factoring allows your company
to stop worrying about cash flow
and start focusing on what really matters
in a business — operating it.
2. What does all of this factoring jargon mean?
Eight fundamental terms
to you understand
the invoice factoring process better.
4. OK, I understand the concept of invoice factoring, but how does it work?
Factoring is a way to
fill the gap between when a company invoices its customers and when it receives
payment for its services. Describing the factoring
process can easily be accomplished by referring to a diagram, like the one below,
or by describing a short series of steps:
5. What’s in it for me?
6. But what will my customers think if I start doing business with a factoring company?
Although this is a common concern for many companies who are considering accounts receivable factoring, it need not be.
A lot of your customers
may already be familiar with factoring. Invoice Factoring is one of the oldest
methods of providing working capital to help businesses solve their cash flow
In fact, credit card transactions are the most common form of factoring used today.
Some of the largest corporations in the world benefit from factoring millions of dollars of their accounts receivable every year.
Your customers will
most likely view the factoring relationship positively because it
that the company’s finances are secure enough to establish a line of credit. Working with a factoring company delivers an important message to your customers — that the business is solid, rapidly growing, and in high demand.
Finally, when a company
establishes an active relationship with a factoring company, all parties
Your customers can continue to receive the business’ goods/services, and they can do it while waiting 30, 60, 90 days, or longer to pay. In the meantime, you get the benefits of having money today, therefore permitting a healthy business relationship on both ends
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