Why Your Company Can and Should Use Factoring
Factoring is a great option for almost any business that needs to improve cash flow and has accounts receivable. By selling them at a discount, you can outsource your debt collection and obtain funding quickly. So why factoring? This type of program has a number of different benefits—here’s a quick overview of the main ones.
Better Cash Flow
First of all, factoring provides consistent, reliable funding. By smoothing out your cash flow, you can ensure that you’ll be able to meet all your daily financial needs. Rather than leaving your assets locked up in client debt, you can get immediate cash after making a sale. Factoring works especially well for businesses in slow-paying industries, where customers don’t provide payment until 30, 60, or even 90 days after the purchase is made.
Secondly, factoring does not have an upper limit when it comes to the amount of funding you can receive. While lines of credit can be maxed out and traditional loans have limits, factoring does not cap your business’s growth.
Next, this funding strategy is excellent for businesses that are in periods of expansion and growth. Since funding increases as business increases, factoring can create a positive feedback loop that allows you to build your company and take full advantage of the market. For this reason, it’s a great choice for start-ups as well.
Credit Doesn’t Matter
Factoring is also a good choice for companies with less than perfect credit. Since decisions are made based on the history of your customers, rather than your organization, even companies that have been turned down for traditional loans can take advantage of factoring programs. If you’re recovering from bankruptcy, are going through a rough patch, have tax problems, or are going through a bank work-out, then factoring might be able to provide you funding where traditional sources can’t.
Here at Lucida Funding Corp, we want to help your company grow and thrive. Factoring is an excellent way to get the funds you need—contact us today to learn more.