If you can’t afford to do that, factoring boosts your working capital so that you can give your clients more time. In other cases, you may want to offer your clients extra time in order to get an edge over the competition. Lets you offer generous payment terms to your clients: Sometimes, you have to offer your clients extra time to pay, because it’s the industry standard.When you use factoring, you don’t have to use any of these assets as collateral. Presents no risk to your capital assets: On the balance sheets, accounts receivable are assets, but typically, they are not as critical to operations as capital assets such as equipment, buildings and land.You retain control over your company and its equity. That isn’t necessary with business invoice factoring. Doesn’t require you to give up equity: If you accept funds from investors or venture capitalists, you may have to provide some equity in your company in exchange for the money.Doesn’t require you to apply for a loan: Although you have to submit an application to work with a factoring company, the process is usually much easier and less involved than applying for a traditional business loan.Additionally, when you use the same company multiple times, you may be able to get the cash even faster.
Provides quick access to cash: Some factors will advance cash to you within 24 hours of when you submit your application, and even when the funding is not that fast, it’s usually quicker than applying for a business loan.Often, businesses turn to factoring because of the following advantages:
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