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Access
to Working Capital
In
today's complex economy, small and mid-sized businesses
often face financial pressure of unpredictable cash flow.
Accounts receivable factoring is the perfect tool for
companies that need low-cost, flexible, and easy-to-access
working capital. By factoring, your company can gain access
to immediate cash to:
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Cover
operating, purchasing, and payroll expenses. |
|
Take
advantage of supplier discounts. |
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Expand
operations or into new markets. |
Benefits over Traditional Lending
In
addition, factoring has numerous advantages over traditional
lending and venture capital. These benefits include:
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Quick
turnaround on funding requests |
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No
added debt |
|
No
loss of equity |
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No
compensating balances |
High
Flexibility and No Commitment
Factoring
provides companies with a great amount of financial flexibility
without any long-term commitments or lengthy contracts.
In fact, with BFC's factoring services you can:
|
Select
the receivables you want to factor |
|
Set
the length of the relationship |
|
Terminate
the relationship at any time, free of charge |
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Outsource
A/R collections to BFC |
A Basic Example
As
you will see by the following example, companies that
factor can also increase their net income for a calendar
year by turning receivables into immediate revenue. Cash
can then be used to finance operations and growth.
|
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Without
Factoring
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With
Factoring
|
|
Revenue
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$
100,000
|
$
200,000
|
|
Cost
of Goods Sold1
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$
60,000
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$
120,000
|
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Gross
Margin
|
$
40,000
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$
80,000
|
|
Overhead2
|
$
38,000
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$
48,000
|
|
Factoring
Fees
|
N/A
|
$
4,000
|
|
Net
Income
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$
2,000
|
$
28,000
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1-Cost
of Goods Sold are computed at 60% of Revenue
2-Overhead is 38% without factoring but is reduced to
24% with factoring as A/R collection is handled by the
factor.
Ready
to factor you receivables? Submit
an Online Funding Request Now!
Or
if you still are not sure if factoring is right for your
business? Simply use
BFC's New Online Factor Analysis Calculator to see
the instant benefits of factoring with Boston Financial
Corporation.
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