USE FACTORING TO GROW YOUR BUSINESS
Factoring is one of the oldest types of businesses in history, having started in ancient Mesopotamia, then expanded under the code of Hammurabi. Since then, the factoring industry has grown to the monumental size of over three trillion dollars of funds in use. Today, factoring is used by businesses included in the list of the Fortune 500 companies as well as other large and small businesses worldwide. What do users of factoring all have in common and what do they know about the benefits of using factoring?
A primary benefit of a factoring relationship is access to working capital and cash flow much more quickly in the chain of sales and collection of revenue. If you were able to maintain all of your customers and sell your product or service on the terms of CASH ON DELIVERY (COD), it would provide immediate cash and expedite the flow of sales to your advantage. However, COD is rarely used in the business world, as the customary terms of sale allow for 30/60 days, or longer, for payment.
However, imagine that you were able to sell on COD and collect your sales price immediately upon delivery of your product. COD would enable your company to immediately purchase more inventory, hire more staff, buy more machinery, etc. Now, you are saying to yourself, “Of course, but if I suggested COD to my customers they would go elsewhere.”
Here is a better answer: By using factoring, you obtain the majority of your sale NOW, immediately upon delivery. You will receive up to 80% (or more) in advance, on your sold and delivered invoice, and you will not have to wait for your customer to make a payment, which delays your cash flow and working capital by as much as 90 days. When you have cash for your sale immediately on delivery, you have options for the growth of your business that you would not have if waiting for normal terms of payment.
Call A/R Funding today to take advantage of these activities and more through the use of factoring.