What is Factoring?
Simply put, factoring is turning your company’s accounts receivable into immediate cash. It’s similar to a loan you might get from a bank, with important differences. A bank will lend you money based on your ability to repay that loan. A factoring company advances you money based on the ability of your customers or clients to pay what they owe you. So, if you have uncollected accounts receivable but need cash today, factoring is a great solution.
Most companies have to pay expenses faster than they can collect their accounts receivable, perpetually disrupting cash flow. And most bank lenders are wary of lending money to small and medium sized companies whose financial statements don’t necessarily reflect their growth potential.
In addition to these cash flow benefits, Transfac also provides credit management and collection services which can save you stress, time and money.
Benefits of Factoring with Transfac:
- Get your cash quickly – in most cases, within 24 hours of billing, you’re funded. Long payment cycles and having to chase slow paying customers are no longer a problem.
- Flexibility – as your company grows, our facility grows along with you.
- Immediate cash for payables, expenses or payroll.
- No monthly payments, unlike a traditional bank loan.
- Reduce or eliminate debt.
- A consistent and dependable cash flow.
- Approval based on the creditworthiness of your customers and clients, not your company’s credit profile.
- Professional credit and collection management to help reduce credit risk and bad debts.
- More time to devote to increasing sales and profits.
- Low fees.
- Low stress.
If your business generates receivables, then it is likely we can help.