When you engage in factoring or selling your accounts receivable, you’re accepting less money for an asset than you might expect to get for it. But there are great reasons for factoring and here are 10 of them:
1. The ready cash you’ll get by factoring will help your company to grow. If you have $2000 ready cash in the bank, but you’ve invoiced for $100,000 down the line this will lead to $75,000. Think about it: the ability to hire more necessary staff, buy needed equipment, and have stock on hand could make a real difference to your business.
2. Ready cash can help you pay your suppliers sooner, helping you negotiate discounts and have a larger credit line than you had before.
3. Factoring your current invoices gives you the capital to take on large, deadline-oriented contracts and orders that you’d otherwise have to pass up because of slow cash flow.
4. Those large accounts are worth money. Having cash on hand now allows you to offer longer payment terms to the new large accounts.
5. Out of marketing comes business. With ready cash you can get from factoring, you can buy billboards, newspaper and radio ads, and even...
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