Furthermore, the high approval rate allows many to qualify for factoring even if they’ve been declined for a bank loan. The quick speed to funding allows a company to take advantage of immediate business opportunities such as large orders or timely expansion. The simple application process eliminates the major hurdles that banks place on small businesses when applying for a loan. And much, much less paperwork and headache than raising equity. Seamless access to funding allows a business to meet payroll, grow unimpeded, earn supplier discounts for early payment or bulk buys, or invest in new equipment to improve productivity.įactoring applications take much less time and paperwork than bank loans. And in terms of size, Harper Partners can fund up to $5 million credit lines, which is comparable to what most banks are willing to provide small businesses. The effective rate businesses pay through factoring is much better than other financing alternatives that don’t rely on their customers’ creditworthiness.įactoring also comes with a simpler application process, quicker time to funding, and much higher approval rate compared to bank financing. This is great for early stage or not quite profitable businesses selling to established companies or the government. No debt equals no restrictions.Īnother benefit of factoring is that the factoring company considers the credit quality of the applying business’s customers. A business sells its accounts receivable, receives cash and that’s it… There are no limitation to what the business can do with the funds. In contrast to bank financing, invoice factoring is not debt. Invoice Financing Compared to Traditional Bank Financing
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