What Do You Need To Know About Selling Receivables To A Factor?

Selling receivables to a factor is a recognized method of obtaining business finance quickly, without needing to take out a loan or overdraft. Ideal for situations where your business requires ready cash in order to pay bills, pay workers or purchase the day-to-day supplies needed to keep things moving on schedule, selling receivables is a convenient, rapid and legal method of getting the money you need without resorting to borrowing.

What Happens When I Sell My Receivables?

You decide which unpaid invoices (receivables) you’re going to sell. Depending on your financial situation, you can sell some or all of the invoices you’re waiting on. The factor will assess them and make you an offer, which you’re free to accept or not, as you think fit. If you accept, the factoring company makes a rapid cash payment for a percentage of the invoices’ value, followed by a further cash sum once the invoice has been collected. This is a relatively straight-forward transaction and means that once the invoices have been sold, you’re no longer responsible for collecting the debt.

Things To Look For In A Good Factoring Company

Ideally, the company you work with should be a well-established, reputable organization with a strong track record in handling accounts similar to those your business deals with. They should clearly explain their fees (factoring companies charge fees on the accounts receivable they buy) and there should be a clear timetable for payment to be handed across to your company.

We Want Your Business To Succeed

We’ve worked with many businesses who have encountered significant financial problems not because they’re not successful, but because their clients won’t pay them when they should! By working in partnership with you to find a good solution to your current financial difficulties, you’ll find that selling receivables to a factor can be a very positive experience for your organization. To discover more about how we can help, call us at (877) 894-8232.