Most People Factor Everyday, and Don’t Even Know It

Think about a credit card transaction for a moment.

You buy an item and swipe your card at the store to pay for it. You get your item right away, but aren’t out any immediate money. Instead, you promise to pay the credit card company for all or part of the bill within 30 days.

The retailer pays a fee on your credit card transaction, which is usually somewhere between two and four percent of the price. By paying that cost to the credit card company, the retailer gets the money it’s owed on your purchase right away while the credit card company waits the 30 days to receive payment from you.

Retailers accept the discount on its credit card purchases as a simple “cost of sales.”

With credit cards, the credit company gets paid on both ends of the deal: from the retailer fees and through annual fees and/or interest on the consumer side. This is an accepted financial arrangement used by millions of people and businesses.

The process of invoice factoring is quite similar.

Except factoring companies get paid on only one side of the transaction. When a business sells an item to another business (its debtor), a factor will pay the business right away while waiting up to 90 days to collect from the debtor. The credit extended to the debtor costs them nothing, while the rate charged to the business is often as little as 1 percent of the transaction cost (possibly even less, if Universal Funding is your factor).

The benefits of factoring far outweigh those measly costs. When you partner with Universal Funding, you get over 65 years of business finance experience along with rates as low as .55 percent. That’s a small price to pay for unlimited cash flow, tax help when needed and complete access to a professional accounts receivable management team.

In fact, it may be the best business finance deal going right now!

-Travis Griffith

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