Factoring 101.com

Benefits to Accounts Receivable Factoring

Here are some primary advantages to factoring your accounts receivable (invoices):

1. Frees up your time.
Outsourcing your accounts receivable invoice to another company can free up your time to focus on more high-value activities and relief stress.

2. Frees up your cash.
Many companies have alot of working capital tied up in their inventory. Accounts receivable factoring allows you to free up this cash that would otherwise be tied up in inventory.

3. Provides fast financing.
Accounts receivable factoring doesn't require a business plan like a bank would require to get a loan. So it's a relatively fast and painless way to obtain cash quickly.

While these are some great benefits to factoring your invoices, the biggest downside is the cost. A 5% fee and other factoring charges can easily exceed the interest on a bank loan over time.

More info on accounts receivable factoring