Is Business Location Considered When Factoring Loans?

Do you need to consider the geographical location of your company when thinking of whether or not you should apply for factoring loans?  While it would be foolish to provide a definitive answer, as there are other variables which may need to be considered, you can make up your mind with the least amount of difficulty by carefully evaluating some statistics that have to do with accounts receivables.

For instance, while it is true that the whole country reeled (and is still reeling in many places) as a result of the economic crisis that overtook the nation a few years ago, not all states have been affected in the same manner or degree.

Cortera, a company that provides credit information on businesses and corporations, released mid last year a list of states with the worst standings, as far as past due accounts receivables are concerned. Here’s the rundown, from highest to lowest:

 

Is Business Location Considered When Factoring Loans?
Is Business Location Considered When Factoring Loans?
  • Florida:  24.59%
  • Minnesota:  23.02%
  • Illinois:  22.97%
  • Georgia:  21.91%
  • Hawaii:  21.79%
  • Missouri:  21.41%
  • New York:  21.28
  • Connecticut:  20.76%
  • Vermont:  20.21%

One of the things that may be inferred from such numbers is that the states mentioned are among those which have heavily experienced the effects of recession. In turn, that makes paying for goods and services difficult.

Should You Consider Factoring Loan? 

If you live and primarily do business in a state that’s included in the list above, in the matter of accounts receivables, you would do yourself a great favor by exploring your options in terms of factoring loans.

However this is not to say that those who do business in other states should already relax their guard. On the contrary, even if geographical location may be considered heavily when deciding on whether you should avail of factoring or not, it should not be the only consideration.

 

Essentially, the most important consideration that you need to take into account is the condition of your business finances.  If you often find yourself with a stagnant or blocked cash flow, and its effects are readily felt or seen on your business efficiency or productivity, then it’s highly possible that you need factoring, regardless of where your business is located.

That’s because compared to other “remedies” to deficient cash flow that you may choose from –  such as getting a bank loan, or deferring action on business purchases, upgrades, or improvements –  getting accounts receivable factoring (a.k.a. invoice factoring) could be the most practical solution.

It’s Not a Loan

For one thing,  factoring loans are not really loans per se in the sense that they don’t come with crippling interest rates. It’s more proper to think of factoring as cash advances. Neebo Capital is a factoring company that can best explain the huge differences between a bank loan and factoring. If you’re thinking hard about whether or not to avail of factoring, especially during rapidly changing economic cycles,  turn to experts like Neebo Capital, to find out what your options are.

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Chris Lanchech

Hi everyone, my name is Chris and I am a junior analyst at Neebo Capital and an inspiring blogger. We enjoy speaking with business owners and entrepreneurs who come to Neebo Capital looking for cash flow solutions. Give us a call toll free at 1-888-382-3766 or Visit us online at www.neebocapital.com

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