Cash Strapped Entrepreneurs

If you’re an entrepreneur, you understand the challenges of balancing cash flow needed for current overhead expenses versus future growth. Finding the funds to build your business to the next level or simply to fill in the gaps created by slow paying clients, can be simpler than you think with an alternative funding option called factoring. Factoring is a cash-management tool that is ideal for any entrepreneurial business or independent consultancy where receivables are part of the business cycle.

In a typical factoring arrangement, the invoices you generate through the sale of your product or service are viewed as assets. The funding source, called the “factor” agrees to purchase the invoices from you at a discount in exchange for the right to collect on those invoices. In most cases, the factor pays you a high percentage of the invoice face value immediately, and gives you the remaining balance (less the fee) after collecting from your customer.

If you haven’t already considered this option, here are a few compelling reasons why you should.

Fast Access to Cash

Factoring is quick, especially when compared to traditional funding sources. ExpoCredit, for example, can issue an approval and place cash in your hands within a few days. Not only can you receive cash almost as soon as the invoices are generated, but the amount of funds available to you is only limited by the volume of invoices (business!) you are able to generate.

No Credit History/No “Collateral”/No Hassles.

Entrepreneurs often use all available means to fund their start-ups, including savings, stocks, credit cards and even real estate equity. This can leave an uneven credit trail. Traditional lenders usually require a smoother credit history in order to qualify, along with some liquid assets to secure the loan. As a professional trying to grow your small businesses, you are also less likely to have an unblemished credit score or to hold the types (and amounts) of liquid collateral that banks want to see.

With factoring, there is no collateral requirement. Your invoices are your “asset”, and the funding is unsecured. And factoring firms do not rely on the credit history or the “track record” of your business as criteria for funding. Instead, it is the quality of your customer base, outstanding accounts payable and purchase orders that matter. [1]

Easy Application Process

Data from the Federal Reserve Bank of New York shows that the average application process for a business loan requires 24 hours of your time. Typical documentation, in addition to the application form, can include a business plan, executive resumes, income tax returns, financial statements, credit history, proof of collateral, articles of incorporation, leases, franchise agreements and much more. [2] After providing all of this, you can wait from 30 to 90 days for a decision.

Factors are more concerned about the ability of your customers to pay than your financial status, so the documentation is light, and the application process streamlined. In fact, the application process is easily executed online via www.expocredit.com.

No Restrictions on Use of Funds

Unlike the restrictive funding from traditional lenders who require specific allocation of funds, the cash received via factoring can be used for any business purpose: to pay suppliers, purchase additional goods for sale or meet other operating needs.

Factoring Can Lighten Your Workload

In conjunction with its portfolio of funding products, ExpoCredit can place its professional team and advanced technology tools at your service. In doing so, ExpoCredit acts as a virtual “Accounts Receivable” department for clients. Additionally, ExpoCredit offers full administration and operations services for institutions such as banks that want to fund factoring transactions.

With factoring from ExpoCredit, you can relax about cash, and focus your attention on your business goals.

[1] https://www.smallbizdaily.com/factoring-alternative-financing-option/
[2] https://www.newyorkfed.org/smallbusiness/Fall2013/index.html

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