Here at TBS Capital Funding, we’re always talking about how great invoice factoring is. That’s all good and fine. But it occurred to us that maybe, at least once, we should back up and tell you simply what factoring is (or isn’t).
Factoring Is Not a Loan – The best definition we’ve read describes factoring – from a business owner’s perspective – as, “a way to get my money as soon as I’ve earned it.” We convert invoices to cash, same day. Our clients think we’re magicians. Try getting a lender to do that.
Factoring Is Affordable – Factoring costs businesses less than the typical credit card transaction, and you get a lot more personal attention for your money. We’ve had more than one client tell us they wouldn’t be able to stay in business without us. Factoring is like listing your house for sale and getting 98 percent of your asking price, in cash, the first day on the market, with no closing costs. Most people would take that deal in a heartbeat.
Factoring is fast – It’s not exactly a drive-through, but you can initiate a factoring transaction and get cash, same day.
Factoring Is Not a Long-Term Commitment – No loan committee, no site visit, or lengthy due-diligence. No contract required. Factor as much, or as little as you want. Factor once, or make it a habit – most of our customers keep coming back because it’s easy and they like us. But that’s totally up to you.
Factoring Won’t Affect Your Credit Score – It’s hard for small businesses to borrow. And if they do, or if they carry credit card balances, it can adversely affect their credit rating. Factoring not only won’t affect your credit rating, but also, a factoring company doesn’t even care about your credit score. A factor is more concerned with your customer’s payment history than yours.