Funding Your Business Through Factoring

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• Small business owners know that running a
  business can include a constant struggle to
  obtain funding. Even businesses with robust sales
  and many clients often find themselves searching
  for ways to inject more cash into their budget to
  keep running full steam.

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• The traditional way for a small business to
  obtain additional funding is to get a business
  loan through a bank or other lender. However,
  obtaining a loan isn't a viable option for many
  small businesses, and may not be the most
  expedient way to access additional funding.

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• One of the most common alternate sources of small
  business funding is factoring. "Factoring" is
  when a business sells accounts receivable to a
  third party business (known as a "factor"). The
  factor advances cash to the client prior to the
  customer paying. The factor also provides
  accounts receivable management and helps with
  collections.

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• In a typical factoring relationship, a business
  sells accounts receivable to a factoring company.
  The factor advances a large percentage of those
  outstanding invoices (typically 80-90), prior to
  the customer paying. The customer pays the
  invoice directly to the factor. Once the payment
  is received, the factor remits the balance (minus
  a fee of 1.5 to 3.5) back to the client.

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• Factoring is a great funding option for many
  small businesses because it does not require them
  to pass a lender's financial check. A factor's
  primary concern is that their clients customers
  have the ability to pay, not the financial state
  of that business. As such, businesses that may
  not have the credit history to successfully apply
  for a loan but do have a reliable, financially
  sound customer base can still obtain additional
  funds through factoring.

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• Invoice factoring is also a great financing tool
  for businesses in markets where there is
  regularly a large gap of time between an invoice
  being billed and payment being received. By
  entering into an agreement with a factor, a
  business will gain immediate cash against
  invoices for working capital.

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• Factoring can be used by small businesses in many
  industries as a way to get additional funding
  quickly and without the hassle of applying for a
  loan. These industries include
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• Clothing and apparel
• Importers and wholesalers
• Trucking
• Transportation and distribution
• Manufacturing
• And more!

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• There are some common myths about factoring that
  discourage some businesses from using it
• Factoring is a last ditch effort Factoring is
  not for businesses who are on their last leg and
  desperate for cash. Factoring is for businesses
  that are growing. Growing healthy businesses use
  factoring to speed up the payment process and
  gain access to additional funds in to pay
  suppliers and take new orders.
• Factoring is just for large corporations In the
  past factoring was used mostly by large
  conglomerates, but this is no longer the case.
  Many small to medium sized businesses commonly
  use factoring.
• Factoring is a bad deal for businesses There is
  no financial burden involved in factoring
  factoring is simply a sale and transfer of
  assets. In addition, factoring removes the burden
  of having to perform credit checks, collect on
  invoices, etc., which frees up additional
  resources.

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• Overnite Capital offers innovative factoring
  solutions to small businesses in many industries.
  Overnite Capital has over three decades of
  experience working with businesses in a wide
  range of industries, and offers a flexible
  pricing structure.
• Contact them today at www.overnitecapital.com, or
  at 800-957-4309.

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SUMMARY

• Factoring is a method of selling accounts
  receivable to a third party business in return
  for full payment minus some fees and commissions.
  For small businesses looking for additional
  sources of funding outside of traditional loans,
  factoring is a quick and easy way to gain access
  to more cash.