An increasing number of small to medium sized businesses are exploring the potential of invoice factoring and what value it provides to their company. But, why are these companies raving about this simple and cost effective solution of alternative financing and how are they using it to help meet their businesses needs?


There are numerous reasons why companies are turning to factoring as the financial option for their business. Mentioned below are top 6 reasons why factoring is becoming the most trusted financing alternative for savvy business owners:

  1. Forget Everything About Debt

It should be noted that factoring does not create debt. It is not a loan; it is in fact the money which you’ve already earned. While factoring your invoices, all you have to do is pay a small sum of money in the form of a fee to gain instant access to your earned money a little bit sooner.

  1. Get Over The Stress of Invoicing

Chasing down payments from a customer can be quite stressful. An invoice factoring company, on the other hand takes up the responsibility to collect all the payments on your behalf. As a result, you get rid of a highly tedious and time-consuming process of collecting payments from your clients.

  1. Opens Up Opportunities

If you wish to expand your business, you need to maintain a steady and healthy cash flow. Accounts receivable financing provides you immediate access to the much required money to help your company reach its goal.

  1. Factoring is Flexible

There are many invoice factoring companies, which offer you the flexibility to factor only the customers you choose – providing you added freedom. Smart companies prefer to utilize the process of factoring only for specific customers. So, are you the fortunate one to have a customer who pays in 15 days? There’s no need for you to factor the – it’s that simple.

  1. A Cost-Effective Solution

Opting for internal back office support can cost a great deal. Factoring on the other hand costs a few cents on the dollar. Compared to the expenses of hiring an employee to manage your accounts receivables, Accounts Receivable Financing certainly makes a good business sense.

  1. Expand Your Business

Majority of the factoring companies generally don’t set maximums and as a result you won’t outgrow factoring. Even if the number and size of your invoices continues to grow, you can keep turning them into immediate cash to fuel continued expansion.