Isn't Factoring Too Expensive?

I get this comment all the time: "Factoring is expensive compared to traditional bank lines". If you can get financing from the local bank that satisfies your needs, then do it. Unfortunately, not everyone can get a bank line of credit to fuel the growth of their company or bail them out of a financial hardship. If you're growing at an accelerated pace, the bank may not be able to keep up with your cash needs. If you're in trouble, the bank probably won't cooperate.

Invoice factoring is a way to get the cash you need when you need it. When deciding whether or not to factor your invoices, you should evaluate the incremental profits derived from taking advantage of this financing tool.