Introduction to AR Factoring

If your business is struggling to keep up with expenses or pay its taxes, or if you need immediate funds to get over a specific hurdle - you might want to consider Accounts Receivable Factoring. It is a financing procedure where you sell your invoices, at a discount, to a financial firm called a Factor.

It is not a loan. It is the sale of an asset, much like a truck or a piece of machinery, and is based solely on the credit-worthiness of your customers, not on your credit history.

Factoring has been around, in one form or another, for hundreds of years. And has, at times, been thought of as ‘last resort’ financing; businesses that factor their debts must be in financial distress. That is no longer the case.

Factoring has made a strong resurgence lately because of the tightening of credit and the difficulties in obtaining bank loans. Bank lending has dried up and is no longer an option for most companies. By contrast, invoice financing is relatively easy to get, terms are less restrictive and the funds are available more quickly.

To compare free factoring quotes from multiple vendors, use the following tool...