For over a century, manufacturers have used accounts receivable factoring to maintain a strong cash flow. Purchasing raw materials which need to be delivered to a manufacturer, who then produces products to be sold elsewhere takes time and planning. In order to keep supply chains moving, manufacturers have relied on accounts receivable factoring to maintain an ample supply of cash on hand. But our business landscape is made up of more than just manufacturers. In this day and age, does industry type really impact the ability to use factoring services?
Removing the Stigma of Accounts Receivable Factoring
Traditional lending channels have derided accounts receivable factoring for as long as the service has been available. The stigma placed on factoring was that it was only used by businesses in dire straits who couldn’t get traditional loans. Naturally, this kept other industries from taking advantage of the benefits of accounts receivable factoring. The reason traditional lending channels take issue with factoring is that it is fast, efficient, and doesn’t place debt on the books. Without debt, businesses can preserve credit ratings and build up capital for growth. Similarly, with a debt-free financing solution available to businesses, traditional lending channels were making fewer profits. Businesses were getting the upper hand, and finally had more options available than debt-based financing.
Making Room for Other Industries
Our economy has changed over the years. Transactions happen faster. Technology has given rise to more and different industries. In addition to manufacturers, more industries are taking advantage of accounts receivable factoring to get quicker access to revenue without debt. Businesses in the service industry, transportation, IT, staffing agencies and more use factoring to improve cash flow, even out revenue cycles, and build reserves for growth projects. New and small businesses also use factoring, when getting immediate access to revenue is most crucial for success and longevity.
FSW Funding is a national leader in accounts receivable factoring solutions. We work with businesses across many industries to provide factoring services tailored to the needs of business owners. If you want to improve the cash flow of your business, but want to sidestep the restrictions of traditional debt-based loans, contact the experts at FSW Funding today.