You probably have heard about Factoring and its benefits. But how does Factoring work? Keep reading to learn more about this convenient financing alternative that gives your business the edge it needs to stay ahead of the competition.
How Does Factoring Work?
Simply put, Factoring helps you unlock the cash tied up in your unpaid receivables.
As you know, companies must often wait 30, 60, or 90 days to get paid from their customers. This means that during that time you have piles of unpaid invoices collecting dust while the everyday needs of your business keep depleting your cash reserves.
Scarcity of cash means more inconveniences, a decreased ability to pounce on new business opportunities, and the looming possibility of not being able to meet important obligations, such as payroll or insurance.
Factoring helps your business by turning your unpaid invoices into a quick infusion of cash. When you Factor your receivables, you sell them to a Factoring company (also known as Factor) who pays you immediately and collects the invoices from your clients in exchange for a small fee.
Two Types of Factoring
There are two basic types of Factoring: recourse Factoring and non-recourse Factoring. Recourse Factoring means that you are responsible for any invoice that the Factoring company is unable to collect from your clients. In non-recourse Factoring, by contrast, the Factor absorbs any uncollected receivables—even less risk for you!
Quick tip: at ACS Factors we are a non-recourse Factoring company. Our clients get to enjoy many other benefits, including fast approval times, no deposit or application fees, easy-to-increase funding limits, month-to-month deals, and no early termination fees.
All in all, Factoring is a fast, convenient, and efficient way to get cash fast and ensure that your business is equipped to succeed in today’s fast-paced world.
ACS Factors: We Turn Your Invoices Into Immediate Cash
At ACS Factors, our mission is to help you get the capital you need to move your business forward regardless of your industry or the size of your organization.
We are located in Upland, California, and have many clients in the distribution and logistics corridor which includes Ontario, Riverside, Fontana, Jurupa Valley, and Moreno Valley.
Reach out today by email (info@acsfactors.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!
