Don’t Get Accounts Receivable Factoring. Get a Line of Credit Instead
As a small business owner, it’s crucial to keep an open mind. Being stubborn or set in your ways could cause you to miss key opportunities or ignore good advice, such as choosing a line of credit instead of getting accounts receivable factoring.
The Hard Truths about Accounts Receivable Factoring
Traditional accounts receivable factoring is when your receivables go to another company who, in return, gives you a percentage of that invoice upfront. There are many reasons why this is an undesirable option:
It is complicated. Some factors insist on a long-term contract, forcing you to factor a certain amount of invoices for a set period of time. This can get confusing when you have different clients with different financing needs or customers who pay on different terms.
It is expensive. Many factors charge outrageous fees, sometimes tens of thousands of dollars, which gets added to the cost of what should be a quick business loan. This adds to the amount of time it will take you to pay it off.
It is embarrassing. In many cases, the factor will call your clients directly and payments will go to the factor, not your business. This is like a red flag signaling to your clients that your business is in trouble.
It is hard to move away from. Numerous companies get caught up in the vicious cycle of borrowing, paying and borrowing again. This can happen when your customers don’t pay but you still have a debt to settle. You will then need to borrow more money to repay the factor.
Why You Should Get a Line of Credit Instead of Using Accounts Receivable Factoring
When looking for short term business financing, it is important to consider all options and choose the method that is right for the unique needs of your small business. For many businesses, the best answer is getting a line of credit to take advantage of profitable opportunities or deal with ongoing cash flow issues.
Financing Solutions (www.financingsolutionsnow.com) has released a line of credit for businesses and non profit organizations that allows you to have an easy process to get a line of credit in place for your business. It costs nothing until you use it and you can pay it back at any time.
With Financing Solutions, you can get an unsecured line of credit up to $150,000. They work with many types of businesses, even those with a less than perfect credit score.
The application process only takes about an hour and you can have the line in place in less than two days. Also, the line will be available for 12 months and you will have the option to renew.
Important Business Don’ts
- Don’t put all your eggs in one basket. Some companies get into serious financial trouble when just one customer is lost. Anything can happen so you should not rely on one client for your financial well-being.
- Don’t forget to pay attention to what’s going on in your industry or area. It’s easy to get so busy running your business that you lose sight of things happening around you. Stay abreast of events and trends to keep from getting caught off guard.
- Don’t wait to get the fast business funding you need from Financing Solutions. Contact them today to get fast cash tomorrow so you can start your journey towards financial freedom.