 The Benefits
Because most banks do not offer factoring to
small and medium-sized businesses, many business owners are not familiar with factoring.
What is factoring, and why should you consider it for your business?
Factoring through Southern Bank Company works as follows:
- You receive an order from a commercial customer
- You produce that product and ship it
- You bill your customer for that product
- The bank purchases the bill from you at a discount
- The bank collects the bill from your customer and you pay a fee based on the time it takes for your customer to pay the bank
The benefit of "factoring" for you is that you receive the majority of your invoiced money within one or two days from the bank, rather than waiting 45-60 days for your customer to pay.
This enables you to increase your cash flow allowing you to produce payroll as scheduled and meet any other financial obligations associated with your business.
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