Five Reasons Why You Need A Factoring Company
Michael Moss owns MDS Funding, an invoice factoring company in Atlanta. For more information about how invoice factoring in Atlanta can provide your business with quick cash in as little as 24-48 hours, visit http://www.MDSFunding.com, email cashflowconsultants@mdsfunding.com or call 866-394-4637.
With access to credit all but shut for most small and medium businesses, companies are increasingly turning to invoice factoring to provide operating cash and money for expansion.
Invoice factoring used to be thought of as alternative financing, but no more. Many companies use it, including large companies like Dunkin’ Donuts, to provide cash.
Factoring is one of the oldest forms of financing. It has existed for thousands of years, but most people today don’t have a clear idea of what it is.
Factoring is a form of commercial financing that uses a company’s oustanding, discounted invoices as collateral. In simple terms, the company borrows against its invoices. So, instead of getting paid in 30, 60 or 90 days, the company gets cash in just a few days.
There are no banks, loan applications or credit checks involved. The invoice is borrowed against your creditor, not your company.
Companies no longer have to wait net 30 days to get paid. And it’s a simple process: The factoring company buys the invoice, the company is paid immediately, and the client (creditor) must pay the factoring company back.
There are many advantages to a factoring company:
1.Speed: How fast do you want your money? Unlike in a traditional bank loan, factoring can give you quick access to your cash in as little as 24 to 48 hours. It’s ideal for companies who have lucrative contracts, but can’t afford to wait to pay their employees when the client reimburses them in 30 days.
2.Financial: Your credit is not under scrutiny; it’s the credit of the company that’s paying your invoice that the funding decision will be based upon. Your company may be a start-up or financially challenged; it doesn’t matter.
3.Credit: As long as the client who invoices you is credit worthy, you can have a healthy factoring relationship. Factor as many invoices as you wish.
4.No loan repayments: Factor as much and as often as you wish — without worrying about interest rates or payment periods. When the client pays the loan, your factoring amount is paid off.
5. Minimal set up: Factoring isn’t difficult. There’s veryu little paperwork involved, with no lengthy credit approval process. Factoring is not a loan, and you don’t have to wait weeks and weeks to get a decision from a loan committee.
Invoice factoring is a legitimate, time-tested process that companies around the world use to get access to cash. If you’re in business and need cash, it’s an option you should consider, especially if you are waiting 30, 60 and 90 days for an invoice and need to use the cash as operating capital.
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