Banking

How To Use Factoring To Finance Your Business

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Executive Summary

Recently, factoring financing has emerged as a financing solution for companies that need to working capital. Factoring is suited for companies that sell to other businesses or to the government. As you know, one of the biggest challenges of selling to other businesses is that they usually pay their invoices in 30 - 60 days. Unless your company has enough cash to wait for payment, you find yourself in a bind. Soon, you'll have to decide between paying suppliers or employees. It won't take long before the company enters into a downward cash flow spiral. The solution to this problem is accounts receivable factoring. Factoring provides you with an advance on your slow paying invoices, giving you the capital you need to pay employees and suppliers.

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