Anyone in business knows that when you need money, you need it fast. There are a variety of ways to acquire money, including: bank loans, cash advances, and even business loan factoring. The latter of these is when a business owner will sell some of his or her accounts receivable at a lower price to a third party. This is done as a funding source in order to raise capital. It’s unlike a small business loan or a straight cash advance. At Speed Fund, we understand that not all options work for all businesses. If business loan factoring seems like the right choice for your business, we invite you to call us and find out more about this creative way to raise capital.
Business loan factoring has been around for years and is common in many industries, such as with textiles. Due to the long period from beginning to end: making fabric to dyeing the fabric to the final clothing product at the end, having long receivables are just part of the business. So for many companies, business loan factoring makes perfect sense. Bad credit isn’t an issue as with a traditional loan, and you get the cash flow your company needs right away.
Business loan factoring works when you make a sale and deliver the service or product. You create an invoice and the factor purchases the right to collect the money from that invoice. In order to do this, they pay you a set amount per invoice, say face value minus a certain percentage. You immediately get a percentage of the invoice and when your client pays the invoice, you receive the rest, minus the percentage taken out. This works for many businesses because the business’ credit doesn’t matter. Whoever is factoring the loan is more concerned about the credit of your clients, hence, no credit check. It’s some of the fastest funding available. To find out more about business loan factoring and if it’s right for your company, contact Speed Fund to talk with any of our professionals today.