Recently I had a client contact me looking to take out a Factoring Loan. It has been some time since I had heard it referred to as this, but what he was referring to was Accounts Receivable Factoring.
Technically, Factoring is not a real loan; it is an advance on money that your company is already owned. While the accounting guidelines can be argued one way or another, the fact is, when a Factoring Loan is done, the Receivables are verified with the party that owes the money and further verifies that they are going to pay the invoices.
Like this, the company that raised the invoice has confirmed the money is owed by the end customer and the Factor merely advances the payment to bridge the gap.
There are several terms for AR Factoring such as Invoice Factoring, Invoice Discounting, Receivables Financing the list is long.
The fact that the US Government is now creating an Invoice Factoring facility or Factoring Loan for many of the suppliers in the Detroit Michigan area is a very positive vote of confidence for the validity and acceptance of Invoice Factoring or the Factoring Loan not to mention the confidence that is now being generated in the economy.
The manufactures of United States and Canada have been torn apart by the recession we are currently in and many businesses have fallen due to the lack of working capital to pay suppliers, payroll and other operations expenses that the businesses need to support regardless if there are collections on their Accounts Receivable or not.
Many manufacturing companies over the last few years have not made it through our recession and many companies have been around for a long time, some were family business over generations which have suffered to the point of extension.
It really does not matter how you refer to this type of financing but if your company is in the need of cashflow through advances on your Accounts Receivable it is best to speak with a Commercial Finance Broker as they will know who has the best programs for your company and it will not normally cost you a thing for their services as the lender pays them, not you.
Technically, Factoring is not a real loan; it is an advance on money that your company is already owned. While the accounting guidelines can be argued one way or another, the fact is, when a Factoring Loan is done, the Receivables are verified with the party that owes the money and further verifies that they are going to pay the invoices.
Like this, the company that raised the invoice has confirmed the money is owed by the end customer and the Factor merely advances the payment to bridge the gap.
There are several terms for AR Factoring such as Invoice Factoring, Invoice Discounting, Receivables Financing the list is long.
The fact that the US Government is now creating an Invoice Factoring facility or Factoring Loan for many of the suppliers in the Detroit Michigan area is a very positive vote of confidence for the validity and acceptance of Invoice Factoring or the Factoring Loan not to mention the confidence that is now being generated in the economy.
The manufactures of United States and Canada have been torn apart by the recession we are currently in and many businesses have fallen due to the lack of working capital to pay suppliers, payroll and other operations expenses that the businesses need to support regardless if there are collections on their Accounts Receivable or not.
Many manufacturing companies over the last few years have not made it through our recession and many companies have been around for a long time, some were family business over generations which have suffered to the point of extension.
It really does not matter how you refer to this type of financing but if your company is in the need of cashflow through advances on your Accounts Receivable it is best to speak with a Commercial Finance Broker as they will know who has the best programs for your company and it will not normally cost you a thing for their services as the lender pays them, not you.
About the Author:
Wade Henderson - very Professional - 15 yrs in the Business Finance Field - reputation for getting the deal done. IMMFinancial.com commercial factoring invoice factoring company Get a totally unique version of this article from our article submission service
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