Factoring financing has been around as a business technique for a long time. In basic terms, it is a transfer of risk. Although many financial experts will use the term factor financing synonymous with accounts receivable financing, factoring is different in that it actually transfers ownership of those accounts receivable. With accounts receivable, there is no ownership transfer, only risk transfer. The “Factor” refers to the third party that is purchasing the risk—in these cases, the accounts receivable. Factoring allows a business to ensure consistent cash flow when needed and allows them to keep less cash on hand at any given time.
Requirements:
- Articles of Incorporation
- In Business for 2 Months+
- Minimum Value of Invoice(s) of $25000
- No Liens or Judgments on company
- Credit score not required