What is the difference between a traditional bank loan and factoring?
Traditional banks scrutinize extensively the applicant, (your business) for their ability to repay the loan. Not many small sized businesses will fair well through the application process which can be lengthy and cumbersome. At the end the business owner may end up with a denial of the loan or a reduction of the loan amount and still remain in a precarious financial situation. Factors rely heavily on the financial strength of your clients, (the debtors) allowing small sized businesses to be competitive without having to incur additional debt. Factors can assist start up businesses, businesses in rapid growth mode or those that are turning their finances around.
