Making the hard decision of a Factoring vs Traditional Bank Loan to help with cash flow and working capital is essential. However, carefully making this decision is crucial for a new company just starting, especially in the trucking and transportation industry. Luckily, at Single Point Capital in Houston, TX, we focus on getting our clients capital for their business through invoice factoring. Here are some of the advantages of Factoring vs Traditional Bank Loan.
- Factoring is not a loan, so there is no debt incurred
- Single Point can have you set up for our factoring services within 24 hours
- Clients can choose to sell your invoices for specific customers or for particular lengths of time
- Same day funding on invoices
- Collateral based on receivables only
- Single Point is mainly concerned about your customer’s credit and not as focused on personal credit score
- Full back-office support and collection services on your accounts receivable
- Interest is accrued, and the initial principle must be repaid
- Getting approval for a loan or any line of credit can take weeks
- Clients are typically locked in for years, and failure to meet responsibilities can result in loss of assets
- Access to cash immediately, but only to your credit limit
- Collateral is on all assets
- Approval typically requires cash flow statements, income taxes, financial plans, etc.
- No assistance on invoice collection
To Sum Things Up…
Business owners often misunderstand Invoice Factoring as a costly financing method, but factors provide many additional services that banks do not. For example, at Single Point Capital, we offer the following benefits in addition to our factoring services:
- insurance services
- compliance services
- fuel discounts
- free load board access
- free credit checks
- We even assist in providing freight through our freight brokerage Single Point Logistics.
Factoring your invoices will not only get you paid faster, but you’ll also have a team of professionals by your side. They can assist you with paperwork and anything else that you might need assistance paying for, such as maintenance work on your trucks. How does that sound?