Saturday, September 19, 2009

What's cheaper and easier than using a credit card to fund your growing company

What's cheaper and easier than using a credit card to fund your growing company

When a business owner cannot get the funds to keep his company growing because of the financial crisis and the current credit freeze, s/he will turn to AMEX or VISA or MC. These are easy sources of credit, but they are much more expensive than necessary. There is a much cheaper form of finance.

It is called factoring and the deal is you sell your Accounts Receivable at a discount which is averaging about 3% across the nation.

Instead of paying off a bunch of individual purchases over a long period of time at 20% or more, a business owner sells their invoice and that transaction is done.

Not every factor is made equal. Be sure to find a reputable one which doesn't require you to factor more than you need to and which doesn't charge you all kinds of fees besides the discount on the invoice.

Eric Standlee

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