Is Factoring Right for
My Business?

Factoring, or Accounts Receivable financing, is a quick, effective means of infusing your business with cash. Like a traditional line of credit or asset-based business line of credit, a factoring line allows a business to more effectively balance their cash outflows/expenses with their cash inflows/revenue.

However, unlike a traditional line of credit, the requirements needed to obtain a factoring line differs significantly. In order to obtain traditional forms of credit, lenders often require:

  • A track-record of consistent profitability
  • Significant collateral to secure their loan
  • Strong personal credit from owners
  • An industry that fits their “strategic” lending requirements

Looking at these more closely, many companies won’t qualify for traditional credit because they don’t fit a lender’s narrow underwriting criteria.

In contrast, factoring doesn’t follow the same “rules” as traditional lending and therefore the benefits of factoring – greater flexibility, steadier cash flow, access to credit and collection services, and more growth capital – are available to a much larger population of business owners.

Whether you’re a new business getting your feet off the ground, a staffing or commercial service firm with minimal hard assets, an entrepreneur that’s experienced successes and failures, or simply tired of being told no by lenders with little explanation as to why, give us a call or fill out our contact form and we’ll help you find the right financing solution for your business.

Contact us today to learn more about factoring with The Southern Bank.