  Is Prairie Business Credit Expensive? How Much Do They Charge? The fee varies with the amount of time it takes to collect the receivables. The average fee is often in the range of 2%-5% of the face amount of the invoice. Factoring costs are tied only to sales. Will the benefits of factoring outweigh the cost? This is the most critical consideration. The cost of capital should be viewed as an investment which will advance the business, just as is a new piece of equipment is an investment. You shouldn't spend money on a piece of equipment unless it increases sales and profit or reduces costs. The cost of acquiring cash through factoring should be weighed in the same way. The immediate and ongoing availability of cash must help to increase sales and profits. The following exhibit summarizes the financial impact on an actual company that uses factoring to fund its sales growths. This company began with $1 million in total sales. By factoring, they were able to double sales to $2 million in the following year. They paid $40,000 in factoring costs, and increase their profit nine times, to $180,000. The factoring cost is 4% and $1 million of receivables were factored in the second year.  April's Feature  What Others Are Saying About Us "We have never seen such growth in all the past 35 years we've been in business. On our way to a banner year! We appreciate all of Prairie Business Credit's support in the past years to help us get here!" - President of Welding Company 25 Years Has Taught Us... After being in business for 25 years, financing over 500 companies, graduating 70% of them to be bankable clients, we have learned a few things along the way.
A shipment isn't a sale. New opportunitues are great, but make sure you know who your customers are. Do they have the wherewithal to pay for your product? Do you understand the terms on which they have agreed to buy from you?
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