Factoring is a quick and flexible form of financing which substantially improves a company's cash flow. Many companies get into a cash bind by extending credit to their customers for 30 days while having to immediately fund certain costs, particularly payroll. This problem only gets worse as sales grow. With factoring, your invoices are used as collateral for a short-term loan which provides you immediate cash with which to meet these expenses. There are several advantages to factoring.
Factoring provides more cash than traditional bank lines of credit.
No arbitrary line of credit amount You borrow based on your sales activity so you are automatically set up to finance your growth. In addition to speeding up your cash flow, factoring also makes it easier to manage your cash since your invoicing is more predictable than when customer payments will be received. Flexibility with your financing Factor when you want, as much as you want, and for as long as you want. With 21st, there is no minimum factoring level or commitment to factor in the future. Improved credit evaluation 21st can provide credit reports and expertise in helping to assess new customers or changes to existing ones.