I had a manufacturing company contact me last month about acquiring a Factoring Loan for their company. While this is not a common term for Accounts Receivable Factoring I understood what he was referring to.

Technically, Factoring is not a real loan; it is an advance on money that your company is already owned. While the accounting guidelines can be argued one way or another, the fact is, when a Factoring Loan is done, the Receivables are verified with the party that owes the money and further verifies that they are going to pay the invoices.

Under this circumstance, the funds that are advanced to the company that raised the Invoices are merely an advance on the funds that will be collected under the short term agreement.

There are several terms for AR Factoring such as Invoice Factoring, Invoice Discounting, Receivables Financing the list is long.

On big plus for the Factoring Industry is the fact that the US Government has decided that it is going to start Factoring the Invoices issued to the Auto maker by the Automotive Suppliers in Detroit Michigan. Not that Invoice Discounting was an unheard of financing method before, but now that President Obama is now endorsing it, many companies that may have passed on this finance opportunity will now take advantage of it.

It has been a long hard road for many manufacturing companies over the last few years and the cash flow which is available to them to make payroll, pay suppliers and cover other operating expenses does not come too soon.

Unfortunately several companies in the manufacturing industry have not been able to make it through our recession, many of which were generational family businesses and they suffered to the point of closing down. I know of one such company that was started in 1937 by the Great Great Grandfather of the owner that had to close the doors of the family business due to cashflow problems.

Whether you call it a Factoring Loan or Invoice Factoring or something else along those lines, be sure to take advantage of this Financing method for your business.

Wade Henderson – very Professional – 15 yrs in the Business Finance Field – reputation for getting the deal done. IMMFinancial.com factor receivable factoring account receivables This and other unique content ” articles are available with free reprint rights.

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