<br/> <br/> It's clear that factoring fees will be greater than loan interest required by a bank. Yet keep in mind that you cannot truly compare receivable factoring (a short-term debt instrument) with a bank loan (a long-term note) since they are two totally alternative sorts of finance.<br/>The key to knowing if you can have the means to factor is not to look just at the bottom-line charge, but to also look at how your company might raise its profits through receivable factoring. Consider unearned income and forfeited opportunities as a result of your shortfall of cash flow. Additionally, take into account the savings you could certainly experience with receivable factoring. You can get rid of late payment charges and make the most of early www.accountsreceivablefinance.org payment or quantity purchasing discount rates. Plus, think about whether or not factoring will allow you to scale down your accounting team by cutting down on the amount of overtime used on collections and credit checks.<br/>It is unusual that firms decide not to factor given that they could not afford to. In reality, in most cases, firms determine to factor because they cannot afford NOT to.