This kind of lending comes in the specialty financing category and is an area banks usually do not get involved in. ‘Factoring’ a receivable involves a lender buying a company’s receivable and advancing money against it to the company. The lender will then collect on the receivable when scheduled and fund the company the remaining money, after taking its fees. This is not to be confused with a “collection agency” which happens when the company is in trouble. Factoring is often seen as a first step for new/growing companies before they become bankable. There are many benefits to factoring that surpass a bank line of credit and companies may choose to stay with the factoring lender rather than go to traditional bank financing, especially in a high-growth phase.
Our expertise in understanding a business and its cash flow needs enables to structure the right facility for your company.