How can factoring help your company grow
One way factoring differs from a traditional bank loan is that there is no limit to the amount of funding that your company can receive through factoring. As your receivables grow, the financing from factoring grows with them. There is no hard borrowing limit as there is with a conventional loan.
Factoring is an effective financial tool for newly formed companies that lack a large reserve fund and a balance sheet. However, many companies stick with factoring well beyond the start-up phase because it can greatly accelerate their growth. Often, companies that began factoring a few thousand dollars just to get through the next month now factor millions of dollars. They have the financial stability to secure a bank loan but their management prefers the flexibility and ever-expanding potential of factoring.