Factoring Company Guide is the Complete Resource for Using Factoring Companies to Boost Your Business Cash Flow

How does factoring work?

Factoring, also known as invoice financing, is an alternative financing method used by growing small businesses and corporations to improve their cash flow. It concentrates more on your company's growth rather than constantly fighting cash flow challenges. Unlike a bank loan, you do not incur debt or need collateral to secure the cash. Factoring professionals focus on the creditworthiness of your clients. When your customers pay your invoices on time and establish solid payment history, the factoring company pays you up front for the invoice amount. You receive the balance once your client has paid the invoice for a small factoring fee.
Deliver goods or services
 
Deliver goods or services
You deliver goods or provide a service to your customer
Submit invoices
 
Submit invoices
Send your invoices to the factoring company right away.
Receive a cash advance
 
Receive a cash advance
You will recieve a cash advance up to 100% of Invoice amount.
Collect from customer
 
Collect from customer
Your factoring company will collect the amount owed from the client for a small fee

Features offered by factoring companies

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Industries served by factoring companies

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About factoring companies

While factoring becomes increasingly popular as a reliable source for working capital in today’s marketplace, more factoring companies are created to meet the growing need. Some factoring companies work with businesses in certain industries and others are generalists, but all have basically the same goal. Basically, all factoring companies provide upfront funding on invoices so that clients don’t need to wait weeks or months to get paid for work they have completed. How that goal is achieved and what services are provided can vary considerably. That’s what sets apart one factoring company from another.

You should expect certain basics from your choice of factoring company, including a solid reputation as a well-funded, well-run, and ethical organization. Business owners also have the right to work with experienced factoring company professionals who:

  1. Listen to you and understand your business objectives
  2. Explain all factoring documents clearly and ensure you understand the process
  3. Provide transparent rates and fees, without “hidden charges”
  4. Have a strong commitment to getting your funds to you as quickly as possible
  5. Remain honest and straightforward with you, whatever the response will be

While services and customer levels vary among factoring companies, the above “bill of rights” represents reasonable expectations for your relationship with any factoring company. This Factoring Company Guide outlines a broad spectrum of available factoring services as well as brief descriptions of more than 150 factoring companies operating in North America.

Know more about factoring

What is factoring?

Factoring is a financial service that provides businesses the opportunity to raise working capital and increase their cash flow without incurring... Read more

Who uses factoring?

Most businesses that sell services or goods to other companies are eligible to factor their invoices. Applicants for factoring services are usually... Read more

How can factoring help a business?

Working with a factoring company can help a business in many ways, but the most important is getting paid quickly for work completed... Read more

How is factoring different from a bank loan?

Invoice factoring provides an affordable, convenient alternative to traditional loans from banks or other lending institutions and features... Read more
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Download Complete Business Guide to Invoice Factoring

Factoring is one of the most progressive financing solutions that enables companies to enhance their cash flow and expand their business.