A key benefit of using invoice factoring is the ability to grow and not be hampered by credit availability. Unlike normal situations working with an institutional bank, which will only allow for a credit line based on historical profitability or tax returns, accounts receivable factoring only relies on you continuing to produce accepted invoices from creditworthy customers. So in other words, the factoring line grows with you and has no top end limit.
When a business is in a steep growth curve thanks to a new contract, it’s important to keep the access to capital open. Receivables factoring allows for wildly fluctuating revenues, strong months and then slow months. The emphasis is to use factoring as a temporary tool to build up a receivables asset base that will allow your company to qualify for a line of credit down the road.