Accounts Receivable Factoring and Why it Can Benefit Your Business
Accounts receivable factoring is a form of alternative financing in which a business that has a high volume of monthly invoices, sells some or all of those invoices to a factoring company in exchange for immediate cash. The amount of cash received for the invoices is generally somewhere in the neighborhood of 80% of the face value of the invoices. After purchasing the invoices, the factoring company then assumes ownership of them, and becomes responsible for collecting payments from customers of the business.
When invoice factoring can benefit your company
There are a number of scenarios which would make it ideal for a small business to consider invoice factoring. When you have a need to get immediate financing, that’s just not going to happen through a bank or any other traditional lender, but it can be fully arranged in a matter of a few days with an alternative lender.
If your credit history is not particularly favorable, you might want to consider invoice factoring as a means of funding, because a factoring company will not be quite as concerned about your credit history, as it will be about the prompt payment history of your customers. Businesses which would not ordinarily qualify for a loan from a bank, might very well qualify for invoice factoring, and receive needed funding for expenses or for business growth.
Factoring can also allow your company personnel to focus more on business tasks rather than on constantly sending out payment reminders to customers. You might even be able to reassign collections personnel in your company, to other areas where their experience can provide greater value to the business.
AR Factoring with Goldendale Capital
If A/R factoring is something that would work for your business, you should contact Goldendale Capital as soon as possible to inquire about, or arrange for possible factoring. In just a few days, you could have the cash in hand that you need to keep your business operating, or to start planning for future growth.