Important Reasons to Consider Factoring Instead of a Loan

Conventional business loans are one of the most popular finance programs available to companies today. These loans provide businesses with sound solutions to a range of funding concerns but they are not the perfect solution to every situation. In fact, many businesses have found themselves in need of a financing solution that is a simple, straightforward alternative to a conventional loan. There are any number of reasons why a business loan might not be the right financial solution for your organization; the circumstances facing decisions makers simply may not accommodate the particular requirements that loans typically carry. Many major corporations have turned to the services of a factoring company; you can, too.

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Time is Money

Companies may find themselves facing circumstances that call for a greater amount of money than there is working capital available. Addressing rapidly developing situations, taking proactive measures against loss, or pursuing a valuable investment opportunity all call for a quick response by decision makers. While the process of applying and qualifying for conventional business loans can take several weeks, a factoring company can provide you with essential capital in a matter of days. This timely response gives you the opportunity to gain an edge on circumstances that demand fast action. A considerable amount of money can be raised in a short amount of time thanks to factoring.

Accounting Convenience and Bookkeeping Advantages

There are a number of other reasons why factoring may be superior to a loan, even when time is not an issue. The structure of factoring agreements can make this funding option more convenient in terms of accounting and bookkeeping. For instance:

  • Factoring does not require the use of lines of bank credit, thereby preserving them for other applications
  • Your company’s credit history does not impact the financing terms; this is based on client credit history only
  • Budgeting and expense forecasting is simplified through easy to understand terms
  • Factoring lines are scalable, so as your company grows, you will have access to more funds

Ready to Get Started?

If you would like to explore this powerful loan alternative, just use our online rate form to get started.

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