What is Factoring?
"Factoring" is a financial term that describes a method of selling accounts receivables. Factoring helps a company speed up its cash flow, thereby enabling it to more readily pay its current obligations and grow.
Factoring allows a company to sell its accounts receivable or invoices to a company like Hawaii Receivables Management (HRM) at a small discount. Never heard of factoring? Actually, this method of enhancing cashflow provides billions of dollars to small and large businesses each year and is really an old financial service used by many large multinational corporations. Only recently has factoring been made available to smaller sized businesses to which banks are reluctant to lend funds. Factoring is filling a tremendous void that banks are unable to fill.
Who needs the Factoring solution?
Many new and fast growing companies have trouble obtaining traditional bank financing due to their length of time in business, profitability or financial strength. Factoring allows these companies to convert their accounts receivable into instant cash. Once a business has delivered its product or service and generated an approved invoice, factoring allows the business to get its money in as little as 24 hours. This type of instant cash flow can support rapid sales growth, allow a company to take discounts offered by suppliers and help a company stay current with its other financial obligations such as payroll and taxes.
Interested? Please review this example of Factoring in action, and understand the benefits. Already convinced? Fill out our quick Application for a free, no obligation consultation.
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