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Banks Versus Factoring for Cash Flow
Link: http://www.ifgnetwork.com
Small businesses owners are looking for ways to improve their cash flow, so they typically think about going to a bank first for small business funding. Unfortunately, invoice factoring or accounts receivable funding is rarely thought of when someone needs cash flow or working capital. Why? Because most business owners are programmed to seek financial solutions from a bank. Factoring is not a typical “bank product” so this alternative is confusing for most business owners seeking funding.
If you are seeking working capital you probably already have a specific amount of money in mind, otherwise known as its line of credit or a credit limit. Traditional funding strategies dictate limits on funds available based on the pledged collateral assets. Although small business loans do offer an advantage of a single lump sum for immediate investment, and business loans help bridge financial gaps, the thing is that today they are hard to come by with the tight credit markets.
On the other hand, small business factoring could help provide a steady and reliable cash flow. By selling your invoices, or factoring the invoices in return for an advance of funds, it will cost up to a percentage of the invoice value but today factoring can outweight standard small business loans and overdrafts.
For more information on factoring, go to www.ifgnetwork.com
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