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Factoring as working capital, will it suit My Business?

Will my Business qualify for Factoring?

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If your business needs financing for expansion or just basic operating capital, perhaps you would also consider factoring.

This is a quick overview of factoring, factoring which is also known as cash flow financing is simply a method of business finance, which releases the cash, already tied up in accounts receivable (your debtors ledger) for immediate use in your business.

Factoring of accounts receivable is a quick and easy way for you to improve the cash flow of your business by assigning or pledging your invoices as collateral. It can be a short-term solution or a permanent business finance tool that can give a company the extra cash it requires, right when it needs it; to meet payroll, increase sales, pay suppliers, accelerate payment to suppliers to get a discount; offer prospective customers extended credit terms if they are solid and this can win more business, or meet just about any business cost or obligation.

When applied to business, factoring is simply the use of the company’s outstanding invoices, to raise capital. This facility bridges the gap between the time the invoice is raised (when the sale is done) to the time payment is received

Business Qualifications

Now in terms of business qualifications or requirements, any business that supplies their goods and services on credit terms could be suitable for a factoring facility as long as their customers have the capacity to pay (credit worthiness) and are good quality businesses and further that the applicant business has sound business systems for producing accurate invoices that are able to be confirmed by their customers.

If you would like more information on factoring and how it might assist you in managing and expanding your business; call Nova Business Finance on 1300 1386 186 or email us at sales@nbf.com.au

Visit Nova Business Finance at www.nbf.com.au

Creative Commons License photo credit: ab_aditya

posted in Factoring, Growing your Business, Working Capital by Small Business Finance News

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