Factoring Receivables: Treat it as Strategy
There is an introduction to factoring over at the OPEN Forum blog. Check it out: Factoring Receivables: When it Makes Sense, When Not.
It is surprisingly hard to generalize on the topic. There are so many different permutations of factoring — by industry, by size of business, by type of factoring.
The biggest point made was the need to view factoring as a matter of your financing strategy. It’s all too easy to treat it as a matter of fast necessity (and it can definitely solve short-term cash needs). But for the right type of business it can be a long-term cash-flow strategy that obviates the need for bank loans or works in addition to bank financing.
