The Facts on Factoring: How HRH Funding Solutions can help you Increase Cash Flow without Borrowing
Cash flow is one of the main reasons businesses fail. At one time or another, every business, even successful ones, have experienced poor cash flow. Cash flow does not have to be a problem any more. Do not be fooled -- banks are not the only places you can get funding. Other solutions are available through HRH Funding Solutions and you do not have to borrow.
What is Cash Flow Factoring?
Cash Flow Factoring is the process of selling accounts receivable to an investor rather than waiting to collect the money from the customer.
Through HRH Funding Solutions Cash Flow Factoring has an ironic distinction: It is the financial backbone of many of America's most successful businesses. Why is this ironic? Because factoring is not taught in business colleges, is seldom mentioned in business plans and is relatively unknown to the majority of American business people. Yet it is a financial process that frees up billions of dollars every year, enabling thousands of businesses to grow and prosper.
Cash Flow Factoring has been around for thousands of years. Factors are investors who pay cash for the right to receive the future payments on your invoices.
An unpaid receivable or invoice has value. It is a debt your customer has agreed to pay in the near future.
Cash Flow Factoring through HRH Funding Solutions deals exclusively with business-to-business transactions, a large percentage of the retail business uses a factoring principal. MasterCard, Visa, and American Express all use a form of factoring in their retail transactions. Using the purest definition of the word, these large consumer finance companies are really just large factors of consumer paper.
Think about it: You make a purchase at Sears and charge it to your MasterCard. The store gets paid almost immediately, even though you do not make payment until you are ready.
Such businesses usually net much more profit with factoring than without, even when the discount is considered.
Factoring vs. Bank Loans
So, why not simply go over to the friendly banker for a loan to alleviate cash flow problems? A loan can be difficult if not impossible to receive, especially for a young, high-growth operation, because bankers are not expected to decrease lending restrictions soon. The relationships between businesses and their bankers are not as strong or as dependable as they used to be.
The impact of a loan is much different than that of the factoring process on a business. A loan places a debt on your business balance sheet, which costs you interest. By contrast, factoring puts money in the bank without the creation of any obligation. Frequently, the factoring discount will be less than the current loan interest rate.
Loans are largely dependent on the borrower's financial soundness, whereas cash flow factoring through HRH Funding Solutions is more interested in the soundness of the client's customers and not the client's business itself. This is a real plus for new businesses without established track records.
There are many situations where cash flow factoring can help a business meet its cash flow needs. It provides a continuing source of operating capital without incurring debt, which can result in growth opportunities that dramatically increase the bottom line. Virtually any business can benefit from factoring as part of its overall operating philosophy.
Every good businessperson must understand the concept and benefits of factoring in order to operate as profitably as possible.
Cash Flow Factoring
Factoring vs Bank Loan
Cash Flow Factoring
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HRH Funding Solutions
856-690-1695
HRH Funding Solutions
Helping Business Growth Since 2002
Invoice Factoring Factoring vs Bank Loan
