The biggest challenge owners of factoring companies face is, a majority of business owners have no idea what a factoring company even does. Still one of the unfortunate secrets of business financing is invoice factoring. With all the types of financing available the concept of factoring accounts receivables for operational cash flow is still not widely considered. The transaction is very easy to explain, simple to set up, flexible to use, and becomes critical to the many companies who stumble onto it.
While there are so many different forms of financing available; bank term loans, revolving lines of credit, loans with warrants, asset based loans, direct public offerings, mezzanine financing, private placements, all sorts of equity participation, a company looking for outside capital has to be aware of, and have some basic understanding of the benefits and drawbacks of all forms of financing before choosing one method or strategy.
Learn more about what factoring companies do, here.