Can accounts receivable factoring help your business grow?
Receivables factoring is an effective way to manage cash flow and increase your bottom line. But many business owners don’t know what it is, or how it could benefit their enterprise.
Here’s a quick explanation of what accounts receivable factoring entails: Accounts receivable factoring is a type of financing that allows you to sell your accounts receivable invoices in advance for immediate access to the funds generated by those invoices. The company you sold the account receivable to pays all advertisement costs, collections costs, and commissions while also allowing you to keep your trade credit going with customers.
“Factoring can be an important way to ensure that you have enough cash available to grow your business and take on new opportunities. It doesn’t require any additional collateral, or affect your current relationships with your clients or vendors,” says Cory Lidle, executive vice president at Comdata Commercial Finance, a leading provider of financing solutions to small businesses.
Factoring is a flexible option that could help make the difference in getting you out of a tight jam, driving growth in your company or expanding into new markets. Here are five reasons why factoring might be right for you:
1. It’s a way to gain quick access to funds. With traditional financing, you might have to wait weeks or even months before you get access to the cash from your loan. With accounts receivable factoring, you can get an advance on cash from your invoices in 24 hours or less.
2. It gives you a flexible source of funding for any purpose. Traditional banks and financial institutions are more concerned with how you’re using the funds than if your business will succeed with them. On the other hand, cloud factor providers like Comdata Commercial Finance look at how much growth your business has experienced and will support it in order to help it succeed.
3. It’s a good way to get more leverage out of your receivables. The average small business has about $20,000 in trade credit outstanding with an average collection period of about 30 days, according to Comdata. Accounts receivable financing can increase your total cash flow and help you get more leverage out of your receivables to grow your business.
4. You keep the same terms with your customers and vendors . “Factoring doesn’t hurt the relationship you have with your clients, or with your vendors if you sell accounts receivable to their banks or factoring companies,” Lidle says. “Accounts receivable financing makes it possible to grow your business, especially in a down economy or if your business is seasonal.”
5. It helps you avoid steep accounts receivable discount penalties. If you’re using an invoice factoring company like Comdata Commercial Finance, you have the option of paying a fee in exchange for not having to pay the invoice discount penalty often required by banks and other traditional financing sources.
Factoring is a complicated topic that might be unfamiliar to many small business owners, but it can be easily explained and managed with Comdata Commercial Finance’s user-friendly online tools and resources. Learn more about how factoring can help your company grow by visiting www.comdata.com/factoring .
About Comdata Commercial Finance
Comdata Commercial Finance provides fast, convenient financing solutions to help small businesses grow. For more than 40 years, Comdata has offered a flexible range of credit products tailored to meet the needs of small and medium-sized business customers nationwide. Offering factoring, asset-based lending and lines of credit, Comdata can provide the financial support you need to help your business succeed. Headquartered in Eden Prairie, Minn., Comdata Commercial Finance is part of the Comerica Incorporated (NYSE: CMA) family of companies. For more information, visit www.comdata.com .
About Comerica Incorporated
Comerica is one of the largest financial services companies in the United States, serving approximately 15 million retail customers, primarily small and medium-sized businesses. Comerica’s products and services include commercial loans and leases; residential mortgages, home equity loans and lines of credit; credit cards; corporate cards; cash management solutions for businesses in the U.S.; trust deposits for banks; securities brokerage services; asset management products and retirement services including defined contribution plans and equity compensation programs. Comerica is the leading provider of linked bank deposits in North America and is one of the largest providers of consumer banking financial services on both a regional (U.S. Census Division) and national scale. Through its Comerica Bank commercial banking subsidiary, Comerica is also one of the largest correspondent banks in the U.S., providing a full range of lending, deposit and cash management services to regional banks, credit unions and community banks across the country. Comerica has offices in Arizona, California, Florida, Michigan, Nevada and Texas. Its shares are traded on the New York Stock Exchange under the symbol “CMA”.
For more information about Comdata Commercial Finance please visit: http://www.comdata-ccf.com/page/companyaboutpage/index.html .
Disponibil en Español: Comdata.com – Factoring
Las notas cobran el costo de ser cortadas. El valor está disponible para cortar la nota cuando la empresa vea que no hay recuperación. La empresa perderá incluso el interés más los costos de facturación y ventas internacionales de los clientes adicionales del corte. Estos son a veces cmplidos para el pago de intereses australianos.
¿Qué tipo de venta facturas?
Primero, la empresa debe definir que tipo de notas.
Una nota general es una tarea que requiere todas las características de la vida normal de la empresa, los pagos se darán dentro del período normal. Un acuerdo particular puede ser un acuerdo más largo o sencillo para un solo período.
Conclusiones
Factoring puede ser una manera fácil para alcanzar la adquisición inmediata de comprar personal y administración para crecer. El factor lograría que usted obtenga el control con respecto al dinero recibido fuera del crédito más rápido.
¿Cuál es el costo del financiamiento?
El factor ofrecerá un préstamo basado en las notas a la luz de créditos usuales, pero con una mejor tasa y menos tiempo.