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Top ten reasons for using factoring accounts receivables

These days most corporation houses know about factoring. But the question that is raised is whether or not you understand how you can use factoring to improve your business? Why you should think about factoring invoices? How much money you will get by factoring accounts receivables? Regardless to say one of the most crucial and essential question is precisely what a factor company does for you?

First of all it is very important to know what factoring is truly all about. Generally, factoring is a financial transaction whereby a company sells its invoices or accounts receivable to a third party, know as a factor, at a discount. The factor gets hold of accounts receivables and also acquires ownership of them. The responsibility of the factor will be to bill the customer, obtain payment and carry loss in the event the customer defaults.

Top ten reasons for using factoring accounts receivables for your company:

  • Factoring can turn your accounts receivable into instant and immediate cash without giving up equity.
  • Factoring is easy, quick and simple.
  • Enable you to give better and more competitive credit terms to customers.
  • Factoring allows you to take advantage of early payment or volume discounts.
  • It allows you to focus on growing your own business.
  • Help you to begin to build and improve your credit. 
  • With factoring you will not have new debt and most importantly factoring is not a loan.
  • With the factoring you can pay your invoices earlier.
  • You will know about the early detection and warning of customer service problems.
  • Factoring will allow you to receive professional collections, credit screening, credit monitoring and invoice processing assistance.  

Once you have received money, you are free to use it the way you want. You can use it for payrolls, for marketing, distribution, for buying raw materials, machinery, or for settling your creditors. The factoring companies unlike conventional financial institutions and banks are not concerned with what you do with the money provided by them. Most significantly, you do not have to pledge any assets or securities when you are factoring invoices. You sell your accounts invoices in return of the money offered by factoring companies.

If you want to know more about factoring accounts receivables, receivables factoring, factor companies and factor invoice, please visit www.factoringfast.com 


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