Article:  Receivables Factoring : How It All Started

 
Receivables Factoring History

Welcome to factoring. Whether you own a business,
look forward to building one or are looking for new financial
tools for your current employer, receivables Factoring can help you reach your financial goals.

Today, factors exist in all shapes and sizes: as divisions of large financial institutions or,
inlarger numbers, as individually owned and operated entreprenurial endeavors.

Many of these private factors sprung up in record numbers as interest rates rose to new heights in the 60's and 70's.
This trend intensified in the 80's, primarily due to the increasing impact of interest rates and changes in the banking industry.
With banks becoming too expensive and too inflexible due to heavy regulation(remember the Savings and Loan crisis?),
the small businessperson was forced to find other sources of financing for expansion and growth.
As more and more banks stop befriending the small bussinesperson, factoring is becoming an increasingy popular option.

This year alone thousands of businesses will sell billions of dollars in accounts receivable,
and they are doing it for profit, growth, and in some cases , their very survival.


Factoring has the ironic distinction of being the financial backbone of many of America's
most successful businesess. Why ironic? Because account receivables factoring is not taught in business
colleges, seldom mentioned in business plans and is relatively unknown to the majority of American business people,
yet it is a financial process that frees up billions of dollars
every year, enabling thousands of businesses to grow and prosper.

Factoring is the process of purchasing commercial accounts receivable(invoices) from a business at
a discount. Business practices today dictate that in order to get business you, as a provider
of goods and services, must extend terms to your customers.

These terms can squeeze the life(and cash is the lifeblood of any business) out of a new or struggling company.

Factoring has a long and rich tradition, dating back 4,000 years to the days of Hammurabi.
Hammurabi was the king of Mesopotamia, which gets credit as the "cradle of civilization."
In addition to many other things, the Mesopotamians first developed writing, put structure into
business code and government regulation, and came up with the concept of factoring.

After a while, Hammurabi and the Mesopotamians went the way of extinct civilizations,
but factoring endured. Almost every civilization that valued commerce has practiced some form of
factoring, including the Romans who were the first to sell actual promissory note at a discount.

The first widespread, documented use of accounts receivable factoring occurred in the American colonies before the revolution.
During this time, cotton, furs and timber were shipped from the colonies. Merchant bankers in London and
other parts of Europe advanced funds to the colonists for these raw materials, before they reached the continent.
This enabled the colonists to continue to harvest their new land, free from the burden of waiting to be paid by their European customers.

Recognize that these were not banking relationships as they exist today. If the colonists had
been forced to use modern banking services in eighteenth century England, the process would have
been much slower. The banks would have waited to collect from the European buyers of the raw
materials before paying the seller of these goods, the colonists. (And at that point, who needed the bank?)
This was not practical for anyone involved. So, just as today, the "factors" of colonial times made advances
against the accounts receivable of clients, enabling the clients to continue with their operations,
long before they had been paid for what they were sold.

With the advent of the Industrial Revolution, accounts receivable factoring became more focused on the issue of credit,
although the basic premise remained the same. By assisting clients in determining the creditworthiness
of their customers and setting credit limits, factors could actually guarantee payment for approved customers.

This is known as factoring without recourse(or non-recourse factoring)and is quite common in business today.

Prior to the 1930's, receivables factoring in this country occurred primarily in the textile and garment industries,
as the industries were direct descendants of the colonial economy that used factoring so specifically.
after the war years, factors saw the potential to bring factoring to other forms of invoice-based business and the expansion began.

 

Factoring Account Receivables Services
For All Industries And All Company Sizes


Business Services Companies
Trucking and Transportation Companies
Government Contractors Suppliers
Security Companies Guard Agencies

Staffing Temporary Employment Agencies

 

Contact our accounts receivable factoring specialists at:

Toll Free:  888-266-0197

Online Invoice Facoring Request Form

Factoring Articles

How To Increase Your Cash Flow With Invoice Factoring


Comparing Invoice Factoring To Bank Loans

Why A Factoring Company Is Necessary


Factoring Business Benefits

Company Information    
Invoice Factoring Frequently Asked Questions
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Our Factoring Company Locations
Invoice Factoring Testimonials


Discover Why Business Chooses Us

OCF INVOICE FACTORING COMPANY
 - Providing factoring services nationwide
 - Over 70 years of factoring company experience
 - Up to 97% Advance Rates


Why Invoice Factoring is Necessary

In recent years, an increasing number of businesses have discovered
that invoice factoring can combat the ups and downs of unpredictable cash flow cycles.

More importantly, factoring companies are providing the business community
with a viable source of working capital when conventional business financing is not always an option.
 

People consider the
invoice factoring
discount a small cost of doing
business. A two-three-percent factoring
discount for a 30-day invoice is common. Compared with the problem
of not having cash when you need it to operate, the receivable credit line
discount is negligible.
Look at the invoice factoring company collecting the  discount as though your business had
offered the customer a
discount for paying cash. It works out the same.


How Invoice Factoring Works


Setting up a
factoring relationship is quick and easy in comparison
to other forms of business financing.  Applications simply call for basic
company information and a customer list.  Years of profitability are not
required which makes invoice factoring an option for startups generating accounts receivables.
 It is possible that funding can occur in as little as a couple of
days after the invoice factoring company receives your application and invoices.

Benefits of Factoring Invoices

Factoring invoices can offer many benefits to cash-hungry companies.
Rather than wait 30, 60, 90 days or longer for payment on a
product or service that has already been delivered, a business
can factor (sell) its receivables for cash at a small discount
off the amount of the invoice.

Payroll, marketing efforts, and working capital are
just a few of the business needs that can be met with this instant cash from factoring.

Factoring invoices provides the means for a manufacturer to
replenish inventory and make more products to sell:
There is no longer a need to wait for earlier sales to be paid.
Factoring is not just a cash management tool for manufacturers:
Almost any type of business can benefit from factoring.

 

Why Receivable Factoring
Appeals to the Start-Ups

Factoring is especially appealing to young and rapidly growing companies. Since the invoice factoring process shortens their business cash flow cycle, these businesses can grow faster. The ability to make more products to sell while waiting for invoices to be paid is largely eliminated. Such businesses usually net much more profit with receivables factoring than without, even when the discount is considered.

Receivable Factoring Company vs. Bank Loans

Factoring has been around for thousands of years. Factoring companies  pay cash for the right to receive the future payments on your receivables and invoices. An unpaid accounts receivable or invoice has value. It is a  debt your customer has agreed to pay in the near future.

So, why not simply go over to the friendly
banker for an account receivable loan to alleviate cash flow problems? A small business loan can be difficult if not impossible to receive, especially for a young, high-growth operation, because small business money bankers are not expected to decrease lending restrictions soon. The relationships between businesses and their small business bankers are not as strong or as dependable as they used to be.
 

Account Receivable Factoring Frequently Asked Questions

Unlike The Others, You Actually Make Money With Our Account Receivable Factoring Rates

 


OUR PROVEN INVOICE FACTORING PROGRAMS
HELP BOOST YOUR CASH PROFITS

Contact our account receivable factoring specialists at:

Toll Free:  888-266-0197

On-Line Factoring
Request Form




Partial List Of Industries That We Provide Factoring
Factoring Staffing company
Factoring Building Products Distributor
Factoring Manufacturing company
Factoring Maintenance Service
Factoring Service Providers
Financing for small and medium sized service companies
such as commercial suppliers, technology consultants
and janitorial companies,etc.

Factoring Metalized coating
Factoring Auto Parts company
Factoring Powder Coating
Factoring Cable Contractors
Factoring Utility Construction company
Factoring Machine Shop
Factoring Oil and Gas Industry
Factoring Trucking company
Financing for trucking companies,
freight brokers and commercial transportation companies

Factoring Freight Forwarding company
Factoring Healthcare Staffing company
Factoring Government Contracts
Financing for companies that provide services and products
to state and federal government agencies

Factoring Distributors
Factoring Freight & Trucking
Factoring Manufacturers
Factoring Medical Practitioners
Factoring Security Guards
Financing for companies that provide security guards
to commercial, industrial and government sites

Factoring Temp Staffing Agencies
Financing for staffing and temporary employment
in the business and medical services field

And Many More


More Links to Help You Find Information

accounts receivable loansinvoice factoring| factoring services
| factoring business| bank factoringmedical receivable factoring
| financing trucking

We are currently providing account receivable factoring services nationwide including the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho State, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.


Just Some of The Industries That we Provide Invoice Factoring Services
Freight Factoring |  Government Contract Factoring | Medical Staffing Factoring
|
Temp Staffing Factoring | Oil & Gas Industry Factoring

 


Staffing invoice factoring company
Building Products Distributor cash flow factoring
Building Products Waterproofing Distributor account factoring
Manufacturing account receivable  factoring
Maintenance Service receivable factoring
Machine Knives invoice factoring company

Custom Auto Body for Emergency and accounts receivable factoring company
Municipality Vehicles  factoring  loan
Parts and Installations business factoring
Metalized coating invoice factoring company
Auto Parts accounts factoring company
Powder Coating invoice factoring
Utility Construction receivables factoring
Machine Shop invoice factoring company
Trucking invoice factoring company
Trucking - Refrigerated Freight  factoring
Trucking - Dry Freight truck factoring
Trucking - Over the Road freight  factoring company
Security Services account receivable financing
Commercial & Industrial Refrigeration invoice factoring



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