Why would anyone want to pay those expensive rates to get funds now for their Accounts Receivables?
YES, on the surface the cost of funds for factoring your invoices is expensive i.e. can range from 1.5% to 4% depending on the
industry, dollar volume, size of invoices, perceived risk, personal and business credits, etc.
In reality, the cost of not factoring your invoices is more expensive when compared to the cost of not growing your
company and its future valuation etc. These aren’t just words written down.
Think about it, if your margins are 20-30% and you can turn your dollars over 1-2 times more per year that more
than makes up for what initially appears to be high cost of funds. When your sales volume plateaus and climbs
says 20-30% over a year…. and you maintain that volume year after year without the cost of factoring and then
sell the company years later with a multiplier based on this new volume. Hindsight is always 20/20.
When looking in that rear view mirror you might now see what was the smartest move you could do today to grow your company.
Find the best long term solution based on the best financial tools you have today!