What is Factoring?
Factoring is a financial transaction whereby a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. The factor provides financing to the seller of the accounts in the form of a cash “advance,” often 70-85% of the purchase price of the accounts, with the balance of the purchase price being paid, net of the factor’s discount fee and other charges, upon collection from the account client.
Financing provided by traditional institutions such as banks requires businesses to subscribe to rigid screening and will require security and collateral. Factoring is not a loan – there is no debt to repay. Invoices are purchased at a discount. Factoring can enhance financial ratios, make balance sheets more attractive and improve credit worthiness.
What is the advantage?
An easy, proven, solution to cash flow concerns. NOT a loan. NO collateral or personal guarantees. We can help you grow your business. Now that is an ADVANTAGE.
Why Factors Western?
We are focused. Factoring is all we do and have done successfully for more than 15 years. We understand small business cash flow needs. We work with clients and their banks to build strong relationships. In addition, you will experience:
- Reduced accounting costs
- Increased productivity
- Professional accounts
- Receivable management
- Credit reports at no extra charge
- No loss of equity
- Peace of mind