Even the most successful, well-managed business can run into occasional cash flow problems. The problem of a shortfall of working capital can be solved in a number of ways. Each such financial solution has its own set of advantages that makes it more agreeable over another option depending on the affecting circumstances. A business loan might be right for one organization while selling accounts receivables might be best for another. Understanding the distinct advantages of factoring will help your financial team make an informed decision the next time a cash flow solution needs to be explored.
A Financing Option That Does Not Involve Credit Scores
Unlike many traditional financing options, a company’s overall credit or the individual owners’ credit has little impact on the actual approval for selling accounts receivables. This means that companies who have suffered credit setbacks can still access competitive and valuable financing opportunities. Additionally, a company’s available lines of bank credit are not tied up by the sale of accounts. This allows your organization to pursue other borrowing opportunities should the need arise. This makes factoring especially advantageous to organizations that do not have existing lines of credit available or have already earmarked those lines for other purposes.
Specialized Experience is a Distinct Advantage
Factoring involves the sale of a company’s accounts receivable to a financial institution like Universal Funding that specializes in commercial finance. Working with an institution that specializes in factoring allows businesses to benefit from a greater breadth of services. This is especially advantageous if you are selling accounts receivables of particular complexity or in large quantity.
Discover the Potential of Factoring
In short, factoring is good for organizations that:
- Do not have open lines of credit or who do not wish to use existing lines
- Have a credit history that makes traditional loans problematic
- Wish to work with experienced financial institutions
It is easy to find out how much your accounts are actually worth. Simply use our handy for to get a rate for your accounts receivables right away.[hs_action id=”1478″]