Wednesday, April 8, 2009

Factoring - A Short-Term Business-Financing Alternative

Occasionally a small business owner is caught between the proverbial rock and a hard place in regards to cash flow. Employees, vendors, suppliers and utilities must be paid, yet your customer’s have decided to delay paying your invoice until 30 - 60 - 90 days from now. Adding insult to injury, the bank cancels your line of credit and asks for repayment. As a small business owner, you may not have an accounts receivable department dedicated to collections. Usually, you or your bookkeeper review the A/R aging report and make calls when time permits. Do you have any options other than a cash infusion from your personal funds, another loan, contacting family and friends or even calling Lonnie, ‘The Nose’, to ask the local mob for a loan, perhaps at 10% a week?

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