Selling Your Receivables
Business Week: “Firms exist that buy high-quality receivables from your business, usually at a substantial discount. These firms are called ‘factors’ and they are especially prevalent in the apparel industry. ‘Using a factor is similar to having a revolving credit line at the bank, only more expensive,’ Busby says. ‘You can use the cash your company receives from the factor right away, while the factor takes on the credit risk and collects what is owed on your receivables directly. This type of financing is beneficial when you have short-term working capital needs, but is not a good solution for financing long-term growth.’”
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