If you’ve heard about invoice factoring and are considering it for your B to B company, be sure it fits your needs. Factoring is a type of specialty lending that’s not meant to replace bank lines or other commercial loans, but to augment them when the need for cash flow is greater than a basic line of credit can provide. Factoring is helpful for young, non-bankable companies with growth opportunities, and for companies that can benefit by outsourcing their credit and collections activity. Full-service factoring companies will provide finance, credit services and guarantees, and accounts receivable management.
Here are the Top 10 reasons to consider and NOT to consider factoring for your business:
TOP 10 REASONS TO CONSIDER A FACTORING COMPANY (OR NOT)
10. Your B2B company needs a line of credit to support growth, but isn’t bankable yet.
9. Your customers demand credit but your suppliers demand cash.
8. Your customers love to keep you guessing.
7. You just don’t have time to manage receivables.
6. Your growth is outstripping your cash flow. (more…)