Receivables factoring is a process where a company sells its outstanding customer invoices to a third party at a discount in order to obtain immediate cash flow. It allows a company to convert its receivables into working capital upfront rather than waiting 30-60 days for customers to pay. The factoring company then handles the collection process and bears the risk of unpaid invoices. Factoring can provide an alternative source of financing for companies that need cash quickly but may not qualify for a traditional bank loan. The factoring company will conduct due diligence on customers' credit histories before purchasing the invoices.

1. What is Receivables Factoring?
Receivables factoring explained

2. What is Receivables Factoring?
Receivables factoring is a form of asset-based financing
and is the process of selling commercial accounts
receivables in order to obtain immediate cash payment up
to 95% of the invoice before their actual due date.

3. Fast Working Capital
Factoring differs from borrowing in that the accounts
receivables are actually sold rather than merely offered as
collateral. Your company can convert its receivables into
immediate operating working capital. You won’t have to
wait 30-60 days or more for your customers to pay.

4. Your Collections Department
This process places the time, cost, and effort of collection
into the hands of the factoring company. Your company
receives the cash it needs, when it needs it, so that you
may best manage your business.

5. Good Alternative to Bank Loans
Receivable factoring can be a great option for companies
that need money quickly, but who aren’t able to secure a
conventional, bank loan. Factoring is known by other
names. Receivables financing, invoice discounting, invoice
factoring and debtor financing are other commonly used
names.

6. Due Diligence
A good factoring company will research the credit history of
the seller’s customers prior to purchasing the invoices.
They will want to be confident that these companies have a
history of paying their bills.

7. Receivable Financing Versatility
Factors look at your clients credit not yours. That means
even if you have IRS liens, credit issues or other financial
problems you may still qualify for receivable financing.

8. What’s Next?
For more information on receivable factoring contact
Paragon Financial Group today at 888.400.5931 or visit us
at http://www.paragonfinancial.net