Accounts receivable factoring, also known as accounts receivable financing, is a form of business finance where a company sells their open invoices to a factoring company in exchange for an immediate cash advance. It’s a common form of financing businesses use to improve cash flow and eliminate the wait for payments from customers.
Companies use this type of financing because it is a fast, simple, and debt-free financing solution for businesses that cannot wait for payments from their customers.
TCI Business Capital is a top choice among receivable factoring companies. We offer month-to-month financing programs ranging from $50,000 to $7 million a month. With the cash accounts, receivable financing provides, companies can meet payroll, manage expenses, and grow the business.
The process for accounts receivable factoring is quick and easy. Here’s how it works:
With the available cash provided by accounts receivable factoring, businesses can take advantage of new opportunities for growth. Adding equipment or staff, opening new markets, or introducing new products are all much easier with cash in hand. Consider the following table below to see how accounts receivable factoring can lead to growth and profits.
|Sales||Sales with Factoring||% Increase||Sales with Factoring||% Increase|
|Cost of Sales||($75,000)||($150,000)||100%||($225,000)||200%|
|Cost of Factoring||$0||($3,000)||($4,500)|
|*Opportunities to negotiate early pay discounts and ask for quantity discounts|
As mentioned above, accounts receivable factoring is a useful source of financing for businesses that may not qualify for a business loan or business line of credit. You might wonder how much would it be to factor your receivables for your business. Even though factoring does not acquirer any debt, like any form of financing, there are invoice factoring fees. To learn what the cost of what factoring for your company may be, try out our accounts receivable factoring calculator.Factoring Calculator
Accounts receivable financing is an ideal choice of financing for many companies. Those in a start-up or growth phase are often ineligible for traditional bank financing. However, these companies easily qualify for factoring.
There are also situations where factoring receivables is a better choice than bank financing. Because top factoring companies like TCI Business Capital have experience in a number of industries, companies can gain insight and information on industry best practices and current trends.
Since 1994, companies across North America have selected TCI Business Capital for their accounts receivable factoring needs. At TCI Business Capital, we provide our clients with superior service and support. Our portfolio of services includes:
For more information on accounts receivable factoring with TCI Business Capital, call us at 800-707-4845, or contact us via the web.