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What You Should Know
About Factoring that Your Competition Should Not!
Growing Your Business by Granting
Terms of Payment.
One of
the fastest methods of growing your business is to grant terms of
payment to your creditworthy customers. Not only does this increase the
likelihood of much larger orders, but it also makes it more difficult
for your poorly capitalized competition to market successfully to your
customers. It has been estimated that on average, a business granting
30 day terms of payment to its customers will generate 1.5 times more
sales than a business that requires prepay or C.O.D.
Factoring allows
you to grant terms of payment to new and existing customers to increase
sales or, if you are already offering attractive payment terms, allows
you to extract the money you have tied up in your accounts receivable
and employ them for other purposes of marketing and production.
Start Saying "Yes" To Lucrative
Contracts.
One of the most
frustrating occurrences for small and mid-size business owners is to be
offered lucrative contracts for services only to be forced to decline
the opportunity due to the demand by the customer for 30, 45, or even 60
day payment terms. Savvy business owners know that through factoring,
such contracts not only can be readily accepted, but the modest fees
associated with invoice financing can often be passed through to the
customer. With a line of commitment established with a factor, your
business can set itself apart from the competition and aggressively bid
and compete for lucrative business contracts from cities, states,
municipalities, and large creditworthy corporations and set yourself
apart from your competition.
Financing Payroll and
Operating Expenses.
By
granting attractive payment terms, payroll and cash flow considerations
can represent a constant concern. When accepting a job or an order
where 45 day terms are required, you must consider the cash requirements
of meeting up to 6 payroll periods and paying your vendors and suppliers
before your invoice is paid. Factoring remedies these concerns and
allows you to focus on marketing and increasing sales rather than
chasing cash.
Unlimited Credit, Fast Funding,
Flexibility.
One of
the major advantages of factoring over more traditional lines of credit
is the relatively endless supply of funds available to purchase your
bona fide invoices and the flexibility and quickness with which funding
can occur. There are no credit committees and directors meetings when
you require additional funding due to seasonal increases in business or
unforeseen, large orders. Under almost all circumstances, such
occurrences simply mean "business as usual".
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What Do Factors Look For
when Accepting A New Account?
The number of industries
that America's factors provide services for each year continues to grow
significantly. To be eligible for factoring, your company must:
• operate on a
business-to-business basis.
• have verifiable
invoices for services performed or goods delivered.
• not have any
significant tax liens or judgments.
• have its accounts
receivable (invoices) unencumbered by other lenders such as banks.
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