Gateway Commercial Finance

When to Use Invoice Discounting Factoring

Invoice discounting factoring may be the most accessible form of funding available to perhaps one of the broadest spectrum of businesses today. Factoring companies are highly specialized experts in collateral evaluation, which gives them tremendous comfort in extending working capital to companies that cannot obtain “traditional credit.”

Why Invoice Discounting Should be at the Top of Your List of Financing Choices?

Aging Reports Are Never Part Of A Business Plan

Given invoice factoring companies take a unique approach to their collateral, they can fund companies in the following situations:

  • Start-ups
  • Companies with Operating Losses
  • Companies with a negative tangible net worth
  • Poor Personal Credit of Owners/Guarantors
  • Rapid Growth
  • Companies in Bankruptcy
  • Companies in forbearance with their bank
Invoice Discounting Factoring

Can you tell me another type of “traditional” financing source that would be considered one of these red flags? If your business supplies goods or services to another creditworthy business on terms, invoice discounting is generally available to you.
Therefore, before spinning your wheels down the conventional road, take a realistic assessment and have a candid conversation with your banker. Determine if your business is even in the ballpark of a traditional credit product. If you’re not, factoring invoice discounting suddenly moves to the top of your list.

Room to Grow

Discounting invoices is one of the few financing sources that grows systematically with your business without the need for timely and complex credit committees. Provided you extend reasonable amounts of credit to creditworthy businesses, a factoring company can give availability against eligible invoices within hours of a request.


Factoring Companies provide comprehensive reporting to their clients. Many business owners lack a competent in-house bookkeeper who can provide the owner with accurate and timely information.

Credit Protection

Factoring companies can provide their clients with credit protection against non-payment due to protracted default or customer insolvency. Many credit protection policies are simply out of reach of businesses due to the high premiums of such coverage. A factoring company can provide this valuable resource to its customers in its ordinary course of business at an affordable rate. This protection can be the difference between staying alive and closing your doors.

Peace of Mind

How does a business owner measure the peace of mind of knowing that the cash is in the account to cover payroll?
How does a business owner measure their ability to focus on areas of the business that generate sales or drive production, knowing that the cash is there to support the business? Very simply, through discounting invoice!
Invoice factoring discounting is a dominant form of financing for American businesses. With the credit markets forever changed, this accessible form of working capital is available…even to the most vocal critics.

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