How Factoring Eases the Cash Flow Restriction For the Airline IndustryThe Airline Industry is only one of many industries that benefit from factoring, a cash management tool that enables access to money that is owed through services of funding and collection, releasing whatever cash flow a business has from outstanding or long-term invoices. Factoring services are generally similar with features such as management of sales ledger and credit control.
The Benefits of Factoring for Business
Factoring is not a financial loan but a kind of intermediary that buys a company’s receivables. Essentially, a factoring company, alternately known as the factor, is a source of funds that pays a company the amount of an invoice minus discount and commission fees. The factor pays a majority percentage of the invoice amount to the business immediately and then pays the balance when it has received the funds from the party that was invoiced.
Invoice factoring ensures the growth of businesses and industries that operate using millions of dollars without incurring debt or diluting equity. More and better cash flow equals more and better business. This kind of cash flow condition results in some of these benefits for the business:
- • Increased marketing of service or product to larger consumer groups.
- • Prevention of constraints on supplies.
- • Reduction of general daily expenses.
- • Receipt of cash or bulk purchase discounts from service or product suppliers.
- • Shifting manpower focus from payment collection to production.
- • Reduction of administrative and collection costs.
- • Investment in income-generating assets such as personnel and equipment.
- • Accommodation of customers who ask for credit terms.
Factoring in sectors like the Airline Industry reduces the hassles and stress of a restricted cash flow as well as improve a company’s credit rating. Factoring helps establish payment terms and conditions with creditors and suppliers, ensure regular and sufficient payroll distribution, and update not only payroll taxes and financial statements as well.
The factor’s main concern is to help businesses realize the generation of more production which translates into more revenue. The factor considers the credit-worthiness of the client’s customers and their capability to pay instead of the client where the invoices come from. And because every business or company is unique in its way, operationally, administratively, and logistically, consider choosing a factoring company with services that can greatly improve your own financial situation for the long term.
Value for Your Money
Admittedly, factoring is not a cheap form of financial mediation. However, reputable factoring companies such as NeeBo Capital is your assurance that your factor can provide you with valuable service that is value for your money. NeeBo Capital has a worldwide base of distributors, service providers, manufacturers, wholesalers, staffing services, professionals, and technology services.
NeeBo Capital offers a wide range of services that provide businesses such as the Airline Industry not only with factoring but also with alternate lending, inventory finance, fast fund programs, asset-based lending, and purchase order loan. Visit our website at www.neebocapital.com and find out how our factoring and financial experts work to shorten the length of time for cash conversion of receivables so you will always have sufficient funds to engage in new revenue-generation opportunities.
Don’t wait while your competitors factor their accounts receivable. Take advantage of low factoring rates in the Airline industry Today!
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General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 09/15/2011 What to know when selecting a Factoring Company