Benefits of Factoring
While companies factor for a variety of reasons, the majority do so to increase liquidity and flexibility in their business. More specifically, factoring can provide:
Faster Cash Conversion
Customers are stretching suppliers payment terms out longer than ever (Read More Here). Factoring allows you to get “paid on delivery” and invest that money back into growing and operating your business.
More Ways to Say Yes
Credit is extended to your company based on the strength of your customer and not on your balance sheet. This allows The Southern Bank to fund under-served business populations and industries that may at one time have been considered unbankable by traditional lenders.
Outsourced Credit Reporting
The Southern Bank acts as your outsourced credit department and helps you monitor and collect receivables. A strong customer list will ensure your customers don’t put you out of business.
Traditional loans and debt can place onerous covenants and requirements on your business. Equity investments and bringing in outside investors is costly and potentially more restrictive than debt. Factoring protects your flexibility and ownership, allowing you to make the right decisions for your business and not your creditors.