Prairie Business Credit August Newsletter

www.prairiebiz.com

When Should You Consider Factoring?

When lack of cash keeps you from making the next sale, factoring may be a solution. When the benefits of factoring (including immediate access to cash, and the ability to continue production, make payroll, pay taxes, and/or take advantage of vendor discounts) outweigh the costs of factoring, then factoring should be considered.

How to tell:

• Is the gross margin on that next sale greater than the cost of factoring?
• Can the savings gained through trade discounts, competitive credit terms, and reduced administrative and collection costs offset the cost of factoring?
• Will accepting new business and keeping it by factoring increase the bottom line?

If the answer is yes to any of these, then factoring works.

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August's Feature

Why You Need to Stop Putting Business Expenses
on Your Personal Credit Card