Banking

The Advantages And Disadvantages Of Business Factoring

Date Added: Jan 2010
Format: HTML

If your business gets cash-flow blockages on a regular basis due to a large number of credit clients being on your sales ledger, then you could find a lot of cash constraints affecting the smooth functioning of your business at regular intervals. Business factoring is a process, where a factoring company would 'Buy' your credit invoices and provide you with immediate cash in exchange for a small factoring fee that could range from 1.5% to 5%. Even though factoring is much more flexible and easy to acquire than a bank loan, there are still some pros and cons that need to be kept in mind, before taking a blind plunge. This paper explains about some advantages and disadvantages of business factoring.