Established in 1985 in Calgary, Factors Western has helped companies from almost every industry with their cash flow needs and given companies the opportunities to increase their business.

Factors Western can help your business to:

  • Convert Your Receivables to Cash

  • Create Reliable Cash Flow

  • Increase Your Business

  • Meet Growing Cash Flow Needs

“Factoring” is the process of converting business accounts receivable to cash, facilitating continued and stable growth, and improved efficiency of the business by creating more productive positive time for owners to better manage their companies.  Factoring is not a loan, but rather the discounted sale of an asset (receivable) for immediate cash.  Invoices are purchased based on the “credit worthiness” of the payer, as opposed to the more conventional lending method of evaluating the credit and security of the client.

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Factoring appears in various forms and is not always easily recognized, yet it may be one of the most frequent transactions in the financial service field. When a credit card is used to conduct a personal or business transaction, factoring occurs. The credit card company guarantees immediate payment to the merchant for the goods and services provided, for a reduced amount, retaining the difference or “factoring fee” as their profit margin. Utility Companies also utilize the concept in the collection of consumer service accounts, where a third party serves as a payment depot, in exchange for a small fee, deducted when funds are turned over to the utility.

Businesses from most industries are likely to encounter the need to consider factoring at some point, although they may not be aware of the service and fully understand the benefits. One circumstance where factoring applies, and the first market niche discovered by Factors Western, are auto body shops who, at one time, could wait up to several weeks after the repair work was complete, before receiving payment from insurance companies. As one of the initial Factoring Companies in Canada, FW paid the shop a discounted value for its invoice immediately upon completion of the work, earning a profit when payment was made directly by the insurance company. Of course factoring has expanded continually since those early days, and Factoring Companies in general, now partner with small to medium sized Canadian business in almost every industry.


Institutional banking has historically been insensitive and uninterested in the needs of small business.  Credit facilities are generally based on balance sheet lending, relying primarily on retained earnings, supported by other “real” security and the usual personal guarantees. During economic downturns, the first affected are often those who are least able to cope with changing and restrictive banking policy.  New and unproven companies, in particular those growing quickly and offering unique and exceptional products, find credit difficult to obtain, or not available at all.  Banks continue to seek larger and more established clients, leaving a significant void in the business community.  These smaller operations may often experience a greater risk of failure, for a variety of reasons. Inability to collect receivables in a timely manner may restrict processing new and larger orders for products and services, and suppliers may require COD for raw materials, Issues like managing payroll, purchasing additional materials and supplies, paying operating costs or credit accounts in a timely manner and making desired capital purchases, are all impacted through maintaining positive cash flow within a business.

Its also not unusual for larger corporate customers to deliberately delay payment for up to several weeks, or even months, often to serve the needs of their own balance sheets and cash position. These larger companies are commonly in a position to take unfair advantage of the small operator’s need for timely cash, offering immediate payment in exchange for substantial discounts, and these discounts can be so extreme that profit margins are severely challenged.  Without adequate and consistent cash flow, the ability of small businesses to compete is seriously impaired.

Business owners and managers tell us they initially chose factoring to satisfy immediate cash flow needs, however, they are also likely to say they continue in long term relationships for a host of other reasons. In fact, numerous explanations exist for the success of this rapidly expanding or re-emerging industry.  Companies becoming acquainted with factoring quickly discover that improved accounts receivable management can help reduce operating costs, provide managers and owners additional time to focus on revenue production, and generally allow for improved business efficiency through consistent and dependable cash flow.  Additionally, newer companies with exciting and innovative products find conventional financing for their business difficult to find and, so therefore, utilize factoring as a means to work towards their growth objectives. Perhaps one of the more attractive features of factoring is the usual absence of personal guarantees and collateral security, reducing concerns about risking personal assets for business purposes.

For several decades factoring offered an alternative for many industries.  Transportation, garment manufacturing and many service industries came to depend on factoring to provide a convenient and simple method of converting receivables into cash, providing budgeted flow of funds into their business on a regular and predictable basis.  Today, Factoring companies have grown to serve the needs of business operators in almost every industry throughout Canada and the U.S.

Since deregulation, banks have focused on more lucrative areas to earn ambitious profits, leaving the factoring market primarily to the private sector.  In recent years, factoring companies have quietly assumed this business discarded by the banks.  More than 400 Factoring Companies now regularly attend the International Factoring Conference held annually in varying locations in the United States. The emergence of factoring companies who focus on smaller transactions and lesser volumes, offer the small business operator a valuable additional source of financing.  Factoring is not borrowing; it is the sale of an asset for cash, at an affordable discount.  Although factoring has been a misunderstood commodity until recently, small businesses everywhere, in virtually every industry, are finding it a welcome addition to their options in achieving effective cash management.