Maybe you’ve been under the impression that account receivable factoring is only useful at the beginning of the business life cycle. However, an established and mature business can also benefit from factoring. Whether your business is a start up or an established enterprise, account receivable factoring can provide working capital and debt assessment.
Small Business vs. Large Business
Small businesses are very different than large ones. They are a very diverse group in many different industries. Small businesses also exist in different stages of development with different financial profiles and operating histories. This makes traditional lending an unsuitable fit for a small business. Between application fees and restrictions on funding, bank loans do not adjust to meet the needs and requirements of small businesses. Business owners know the unique challenges that come with owning and managing a small business. Time and resources are always limited, and sometimes, you need funding fast. With a certain minimum in Accounts Receivables, you can partner with a factoring firm to receive funding in just a few days.
Why Accounts Receivable Factoring Works
The best part is that factoring is not a loan; you do not incur debt or pay interest. You also don’t have to worry about fitting into a constrained bracket. Maybe you need less money than a bank wants to give you, or you don’t want to have to work within brackets. Also, factoring can provide future funds if needed. With traditional loans, you would have to reapply all over again for funding. It also does not make adjustments for your individual business’ needs.
Account receivable factoring knows that one box does not fit all. Not every small business fits perfectly into a checklist or bracket. Factoring is done by every single business sector in the United States and has adapted to the unique characteristics of the industry. If your business is expanding rapidly or steadily maturing, you can benefit from account receivable factoring.