What is Factoring?

Simply put, factoring is the purchase of a company’s accounts receivable for immediate cash. It’s similar to a loan you might get from a bank, with two important differences. A bank will lend you money based on your ability to repay that loan. However, a factoring company advances you money based on the ability of your debtors to pay what they owe you. So, if you expect to collect on several accounts receivable new week, but need cash today, factoring is a great way to get it.

Most companies have to pay expenses faster than they can collect their accounts receivable. This obviously disrupts cash flow. And most bank lenders are wary of lending money to small and medium sized companies whose financial statements don’t necessarily reflect their potential.

In addition to these cash flow benefits, Transfac also provides credit management and collection services which can save you time and money.

Benefits of Factoring with Transfac:

• Get your cash quickly – in most cases within 24 hours of billing, thus eliminating long payment cycles and having to chase slow paying customers.

• Flexibility – as your company grows, our facility grows along with you.

• Immediate cash for inventory, equipment, expansion or payroll. No incurrence of debt and no monthly payments, unlike a traditional bank loan.

• Reduce or eliminate debt.

• A consistent and dependable cash flow.

• Approval based on the creditworthiness of your accounts, not your company’s credit profile.

• Professional credit and collection management to help reduce credit risk and bad debts.

• More time to devote to increasing sales and profits.

• Low fees.

• Low stress.