Invoice Factoring and Traditional Loans

Why has invoice factoring been gaining popularity in recent years? Business people are choosing this alternative funding method over bank loans or traditional loans from other financial institutions for a variety of reasons.

As banks become more restrictive and the marketplace changes, businesses are appreciating the flexibility of invoice have left many companies with fewer options for financing.  Factoring companies, including their accessibility for companies with no or poor credit history. Factoring professionals focus on your customers’ creditworthiness, not your credit background.

Invoice factoring is a simple process that gets you paid upfront for your accounts receivable, without waiting weeks or months for checks from customers with long payment terms. You submit your invoices and the factoring company sends you a large percentage of the value of the invoices right away – often the same day.

Let’s take a look at some differences between invoice accounts receivable factoring programs and bank loans:

 Bank loansInvoice factoring
Speed and qualifications· Lengthy approval process

· Need collateral

· Need established credit history

· Approved within a few days

· No collateral needed

· No credit history needed

 

 Impact on future· More debt is added to your business

· Payments based on unknown, uncertain future earnings

· You incur no debt with advance on invoices

· Your cash advances on reflect what you have already earned

Value-added services· No additional services offered by banks· Free collections, credit screening services, online record-keeping, and more

 

When you add up the advantages, the benefits of Factoring accounts receivable your invoices become increasingly attractive to many companies seeking working capital. Interstate Capital, one of North America’s leading invoice factoring companies, has nearly 25 years of helping companies speed up their cash flow and grow their business. Get an instant factoring rate quote today.