The History of Factoring Def, How Factoring Invoices Started…

Believe it or not Factoring Invoices is older than the last 5 presidents combined! If you still can not define factoring then you are most likely a business who is not using it as leverage. Almost all fortune 500 companies’ factor invoices to better manage their cash flow.  Neebo Capital is one of the top picks for US Fortune 500 companies.

Factoring def  goes like this…

The arrival of the well-known business practice of factoring invoices began since the inception of commerce that dates back 5,000 years. The earliest recorded factoring transaction of invoices was dated sometime before the revolution in the US when cotton, animal furs, timber and other materials were shipped from the colonies to Europe’s continent.

This was a way for ship sailors to carry on the harvest in their new land,  where merchants  awaited to loan their finances to the colonists.  We also see factoring def of invoices throughout the Industrial Revolution when factoring became more focused on credit when they assisted clients in determining the creditworthiness with their customers and setting credit limits.

The method of factoring invoices has been greatly approved over the years. We now have the ability to give instant quotes to potential factorees and loan then cash for their receivables within hours. Visit Neebo Capital and get an instant quote with rates as low as .59%.


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Picking The Right Factoring Company

We all agree, shopping around online for the greatest deal is a smart thing to do, however when is  it too much when you are looking for a good factoring company.  Often we get prospects who tell us they have submitted applications to multiple factoring companies. This is perfectly fine it is in your best interest to find the best rate!

Now most sales people will feel the pressure when you tell them they are not the only game in town. For a couple reasons. Obviously, they hate competition. But more importantly, they understand that few prospects have the time to manage such a large number of applications efficiently. Many times it is easy to get confused with what factoring company promised what, who has the best terms for you, and what company will work best for your business. Filling out multiple applications to factoring companies may not be the best approach.

Keep in mind it is in your best interest to evaluate each factoring company for the best outcome for you, but filling out applications like a wild man is not the best approach. The best option is to submit applications like a wild man just  one day. This will be your prospecting day, after getting calls and fining out information then pass through the evaluation phase. Again do not do this if your back is against the wall, put the pressure on the factoring company not yourself.

As soon as you start to get in touch with the factoring salespeople try your best to learn from the phone call, play the field and see what options are best for you.  Try the following questions to ask the factoring companies:
1. What is the largest client they can work with? What is the smallest?

2. Do you specialize in any industries?

3. How long are the contract terms for?

4. What do you know about your particular industry?

Then, based on your phone interviews, select the top company and get serious about submitting information. If you want to use competition to your advantage, there is nothing wrong in telling the sales person that you have interviewed a number of factoring companies but only applied with the top two (or three) to see who gives you the most competitive proposal. This will show that you have carefully evaluated companies and selected the top contenders. This shows that you are a sophisticated buyer and will probably get you better proposals than just sending an application to anyone and everyone you meet.

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Let us Define Factoring differences & Bank Loans


Many businesses understand poor cash flow management can have an impact on operations. This article as based on defining factoring. Factoring is not a widely known concept. However there are many benefits that can come with factoring including a stronger cash flow.  If you wonder what is the difference between a bank loan and factoring invoices this article is for you.

Factor companies such as Neebo Capital make funds available within 24 hours, even when banks are not willing to lend you the cash, because factor companies focus first on the credit worthiness of the debtor, the party who is obligated to pay the invoices for goods or services delivered by the seller. Meaning your customers financial strength determines eligibility.

Banks on the other hand, the necessary emphasis in a bank lending relationship is on the creditworthiness of you as the borrower, not that of your customers. The key terms and conditions under which the small firm must operate differ significantly. To define factoring it is important to explain conditions involved with factoring invoices.

For medium and small businesses, their choice is slowing their growth or the use of external funds beyond the banks. Thus seeking venture capital to aid growth , which is difficult and you give up ownership, Or factoring invoices which is immediate, typically low cost to the business and lowers risk while building financial growth.  When considering combined cost and availability of funds and services perspective, factoring creates wealth without giving up ownership.

So now we see it is more beneficial to factor invoices rather than seeking venture capital. However let us define factoring a bit deeper.  Through factoring invoices access to cash can be obtained in a matter of a week or two, whereas securing funds from venture capitalists can typically take up to six months. Factoring is also used as bridge financing, while your business pursues venture capital and in conjunction with venture capital to provide a lower average cost of funds than equity financing alone.

Many businesses seek to take advantage of factoring invoices along with angel investments and bank loans. This is a solid way to cut down your total costs of funds while strengthening your cash flow.

Factoring invoices is a very attractive alternative to raising money for small fast-growing businesses. This process is also great to turn around an established that is having management troubles, or dealing with difficulties in the economy. Factoring invoices allows extra time for management to focus on growth and not worry about collecting invoices.

Business who cannot define factoring may view it as a last resort. However if used properly factoring invoices can create wealth needed to grow operations at costs of less than 1%. Large companies take advantage of factoring invoices to show cash on their balance sheets. We define factoring to help smaller organizations understand what the larger firms do; overdue receivables can harm operations.

Webster dictionary will define Factoring as a method used by a firm to obtain cash when the available cash balance held by the firm is insufficient to meet current obligations and accommodate its other cash needs, such as new orders or contracts. If growth or even trouble meeting pay-roll is an issue factoring your invoices is a great option.

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