When it comes to financing, there are no one-size-fits-all solutions. Different businesses have different needs. However, if you are weighing the pros and cons of factoring and bank loans, here are three facts we believe you should keep in mind.
1. Factoring Is Fast
If there’s one thing you have to know about banks is that they hate risk. They want to limit the possibility of losing money to the absolute minimum. No doubt, this makes sense for them. For you, it means waiting weeks (if not months) and jumping through endless hoops when you apply for a bank loan.
Factoring is the opposite. When you factor your receivables, the process moves at a much faster pace than a bank loan. This makes factoring the ideal option for when you need cash fast, whether it’s taking advantage of a business opportunity, meeting a payment deadline, or anything in between.
2. Factoring Comes With No Strings Attached
When you take out a loan, you are asking a bank or another similar institution to give you money. And while you will repay this money, the lender is in a position to dictate certain conditions.
Depending on the type of loan and the lender, you may be required to use your bank loan only for certain purposes that usually exclude ongoing expenses. With Factoring, on the other hand, you are free to use the money as you see fit. The reason is simple: Factoring means selling your invoices, so you are not borrowing funds; you are simply getting faster access to the cash locked in your receivables.
3. Factoring Creates No Debt
Taking out a loan puts your assets at risk — plain and simple. Needless to say, this is an obligation you shouldn’t take lightly.
And while it’s true that most businesses need to take out a loan sooner or later, you want to do it only when it makes financial sense. Borrowing at the wrong time means jeopardizing what you’ve worked so hard to build.
For most situations, Factoring is a convenient alternative that gives you the speed and flexibility you need to grow your business without creating debt.
ACS Factors: We Turn Your Invoices Into Immediate Cash
Looking for a Factoring company you can trust? We are located in Upland, California, and have many clients nationwide in the distribution and logistics corridor which includes Ontario, Riverside, Fontana, Jurupa Valley, and Moreno Valley.
Reach out today by email (email@example.com) telephone (909-946-5599), or through our social media accounts on Facebook, Twitter, and YouTube, and start converting your accounts receivable into cash today!