When small business financial problems arise, we sometimes forget what has worked for years and years – factoring.
Factoring is selling your accounts receivable, or invoices for money that is owed to you from commercial customers, in order to get the money sooner than the 30 to 60 days companies are taking to pay. Factors speed up the realization of money from your receivables; they are not a collection agency; they don’t buy bad debt.
Standard accounts receivable factoring has been around for more than 4,000 years. IFG begins the single invoice factoring process with due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by IFG and the client receives their funding. At the end of the credit period, the debtor pays IFG directly completing the transaction.
Factoring companies like IFG are experiencing an increase in the number of small businesses that are taking advantage of single invoice factoring solutions that can help them stay afloat during these tough economic times. Payments are running later than ever, and many businesses are finding themselves strapped for cash for the first time. The reality is that bank loans take a long time to process while factoring is a 24 hour turnaround.
Courtesy: Phyllis Rector of The Interface Financial Group
August 20th, 2009 at 3:38 am
With the economy collapsing, I think factoring is a good way to keep them afloat. This offers a more lucrative opportunity and can be the saving grace of close to bankruptcy firms. Your article helped shed light on the real meaning and value of factoring. Thank you.