Accounts Receivable Factoring

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June 17, 2019

by a searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School in Austin, TX, USA

Has anyone sold their accounts receivables at a discount to improve cashflow for their business?  I am looking for pros and cons of using a factor to generate some cashflow. I like the fact that it is not adding debt or diluting equity while generating cash. 


Also taking any factor recommendations. 

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Reply by a lender
from The University of Michigan in District of Columbia, USA
As long as it does not disrupt working capital requirements factoring can be a great way to raise capital quickly. When it makes sense, we often structure acquisitions with some of the capital coming from A/R financing. It enables the company to have less debt post-transaction. If you are based in the US, feel free to reach out to me to discuss options. We can help factor from $5K all the way up to $50MM.
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Reply by a searcher
from University of Houston in Helotes, TX, USA
The company I’m trying to buy factored for a few years to the tune of %5 of top line/annually which I thought was pretty steep.
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