Using factoring to grow a company is far less costly than alternative options, such as merchant advances or other alternative financing methods provided by online lenders.  It is far cheaper than trying to sell equity or ownership in the business, if that is even an available option.  Factoring fees are similar to merchant fees assessed on credit card sales and are far less costly than losing new sales opportunities.
Most retailers get paid for their goods and services by accepting credit cards for payment. When they do this, they actually receive the sales price less a merchant fee, which may be 2% to 3% or more. The revenue to a factoring company is similar and is usually a function on how long it takes for customers to pay their invoices.
By accelerating cash flow, businesses have the opportunity to take advantage of supplier and vendor discounts. Additionally, by paying bills on time or early, you can enhance your credit profile with these vendors and suppliers, making them more responsive on future orders and requests.
Compared to other alternative means of financing, such as selling equity or online lender funding, factoring is much more cost-effective option and allows the owners to preserve their interest in their business.
Lastly, factoring companies offer additional services including account receivable management, credit analysis, underwriting, and, in CFR’s case, business consulting and accounting support.