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Accounts Receivable Funding VS Other Business Financing Alternatives

 ~ by Gary Phillips, CFS

  • Self Finance
  • Commercial Banking
  • Venture Capital
  • Initial Public Offering (IPO)
  • Asset Based Lending (ABL)

There are several options when it comes to raising capital for your company. Perhaps you’ve already tried or considered some of them in the past. For a closer look at the methods available, and how they compare to Factoring, consider the outline below…

Self Finance


  • Dealing with Friends/Relatives Lending Money – Strains Relationships.
  • Capped – Credit Limits on Availability.
  • High Interest Charges on Credit Cards.

Commercial Finance


  • Credit Decisions Based on Strength of Client.
  • Encumbers Business and Personal Collateral.
  • Strong Personal Credit History is Required.
  • Minimum 2 years in Business & Profitable Track Record.
  • No Bankruptcies, Tax Liens or Judgments Permitted.
  • Credit Lines Capped – Severely Limits Future Borrowing Capability.
  • Restricted Use of Funds – Must be Accountable to Lender.
  • Lengthy Approval Process Which Can Take Weeks (or even months in some cases).
  • High Administrative Fees.

Venture Capital – “VC”


  • Give up Ownership and Equity of Company.
  • Give up Control of Operations.
  • Royalties or Kickers May be Enforced.
  • High Due Diligence Fees.

Initial Public Offering “IPO”


  • Security Exchange Commission Regulations Adherence.
  • Decreases Control of Company.
  • Give Up Equity.
  • Harmful Liquidation Ratios.

Asset Based Lending (ABL)


  • Strong Corporate Financial Statement Required.
  • Strong Personal Financial Statement.
  • Non-Encumbered Assets Required.
  • No Flexibility.
  • Limits Future Borrowing.

How does a Factoring facility differ from other financial options?

  • Stimulates Growth
  • Quick & Convenient
  • Cash within 24 hours
  • Unrestricted Use of Funds
  • No Separate Loan Applications
  • No Long Term Contract to Sign
  • Improves Financial Statements
  • Full Accounting Services Included
  • Unlimited Capital – No Maximums
  • Create Cash Without Debt – No liability
  • Increase Sales & Fulfill Purchase Orders
  • Relies Primarily on Creditworthiness of Customers
  • Creates Continuous, Predictable, “On-Demand” Cash Flow

 When the banks say NO – we typically say YES!

You have choices. Would Factoring be a better one for your business? Let’s talk.