Since we’ve been providing factoring services for a long time, I am aware of many of the questions that surround this commercial finance tool. Tool because that is what it is, a solution to fix a problem. There are many misperceptions about factoring; it costs too much, your customers will think you are having money troubles and once you start you can never get away from it.
So let’s begin with the cost – relative to cash advances and bank lines of credits. Under any measure invoice factoring is cheaper than fintech cash advance loans, but your access to the actual capital is just as easy to obtain and less onerous when it comes to paying the loan back. You can call up and say I need $100K in my bank account tomorrow and here is a batch of $125K worth of invoices (80% advance) and we will wire the funds the next day. But rather than pulling a daily or weekly payment from your bank account, your customer pays their invoice, thereby closing the transaction – done. So factoring is as easy to use as cash advance loans but much less expensive.
Of course getting a loan from a bank is optimal with regards to cost, but it might not be the best solution at this time. A bank will qualify your company for a credit limit. Once you have reached that limit there are very few options to access more capital. With factoring we grow right along with you, there is no limit other than the creditworthiness of the customer. Whatever threshold is feasible to have against a creditor like Home Depot, will be your limit. I might add that would be the same with a bank.
Our company is very hands on, when you send a message or pick up the phone you are talking to decision makers. We have no layers of administration and managers. We decide what to do, and we do it quickly. You will find a substantial amount of flexibility in the way we fund your company. As long as everyone’s needs are met, then we continue to operate successfully.