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Why Invoice Factoring Is Better Than Bank Loans

At some point, every business will need an influx of capital. Startups and rapidly expanding companies are constantly looking for solutions to their financial needs, and bank loans are only able to do so much. Invoice factoring can be a great way to get the cash you need now without relying on assistance from a bank. How is invoice factoring better than bank loans? There are several advantages that they can deliver for you and your business.

No Payback

Factoring is based on your accounts receivable. That means the money you’re receiving is determined by your business and earnings, so there’s never any need to payback anything. You aren’t borrowing money. You’re being advanced capital on payments that you would normally receive anyway, but you aren’t waiting on those funds to be delivered from your clients or customers. Since there’s nothing to pay off, you won’t have to worry about making monthly payments or interest rates.

Avoid Nonpayment Issues

Depending on the sort of factoring you receive, you may have no reason to concern yourself with non-payments. The factoring company will be responsible for collecting, so you won’t need to worry about working with collection agencies or finding ways to acquire the money that you are owed. That responsibility will instead fall on the factoring provider.

Quick Response

It can take weeks or even months to hear back about a loan, and the paperwork can become tedious rather quickly. That’s not even mentioning concerns about collateral. With invoice factoring you can get a response in as little as a few days. That swift determination helps you make decisions and move forward quickly. This also means you could be receiving money the following week.

No Commitment

Because it’s not a loan, you won’t be stuck with monthly bills for the next year or several years. Perhaps even better than that, you often won’t have any lengthy contractual obligation to continue with factoring for a fixed period of time. You can use factoring services as much or as little as you like and for as long as you prefer. There are no requirements either way.

Office Support

Your factoring partner can provide ongoing support. This helps you to adjust your invoice factoring however you like. You can choose which accounts to hand over, which ones you prefer to keep in-house, and how much you choose to use their services. If you have any questions or concerns, or want assistance with making decisions, you have contact information and people that can aid you throughout the process. That’s not the sort of support of assistance that you would normally expect from a bank.

Are you curious about what benefits invoice factoring could provide for your business? There are many invoice factoring companies in Atlanta, and you should be able to find one that will make an excellent partner for your needs.