Factoring Loans

Why Should You Consider Factoring Loans?

New businesses and even some older businesses in Willisburg KY often find their ability to grow limited by their ready access to working capital. They may need an infusion of cash to purchase extra inventory or find themselves short of cash for a desired expansion. If your business extends credit to customers, you may have a ready source of fast cash when your business needs it: factoring loans.

Factoring loans are a type of credit extended based upon your accounts receivables. They don't require any other collateral, and can provide you with an ongoing line of credit. Are factoring loans a good tool for your business?

What Are Factoring Loans?

Factoring loans are designed for businesses that need ready cash flow and prefer not to wait 30, 60 or 90 days for customers to pay their invoices. They're used in almost every B2B industry and in industries that sell to the government. They give businesses access to the money that's owed to them before it's actually collected.

Technically, most companies that provide factoring loans in Willisburg KY actually purchase your invoices from you. They immediately pay you a percentage of the face value of your invoices, and the remainder (less a factoring fee) when the invoices are paid. The effect is that you have access to about 85 percent of the money owed to you within 24 hours of writing an invoice for the cash, and the remainder less a fee - typically, about 3 percent - when your customers pay their invoices.

What Are the Benefits of Factoring Loans?

Aside from the obvious benefit of [statetitle] factoring loans, you'll also save money on billing and collections for the accounts you choose to factor. If your business would benefit from having immediate access to money from your sales, factoring loans may be an excellent tool to help you grow your business and ease your cash flow problems.