Is Accounts Receivable Factoring Right for your US-Based Business?
It helps small businesses get the working capital they need to maximize business opportunities and to keep their business profitable. To decide whether AR factoring is right for you, it bears considering the following things.
Is Your Business a New One?
Having the capability to meet payroll, purchase raw material, and invest in a unique idea can make or break your business. However, startups do not usually have plenty of networking capital. Oftentimes, they are unable to get bank funding, which provides them with a few other options to raise capital. Selling accounts receivables can also be a fine way to raise capital without having to take on additional debt.
Does Your Business Have Issues with IRS Tax?
AR factoring is a great financing tool to use if a company experiences IRS tax-related issues. An experienced factoring company will negotiate the tax lien subordination with Internal Revenue Service, and get you the money you need fast to get the lien lifted. In the event your existing finance company cuts you off, then the factor would be able to buy it out.