austin small business

Austin Entrepreneurs Are Turning to Factoring

Many Austin business owners are facing the challenge of finding additional funding for their growing business.  In response to the economic uncertainty, traditional banks are tightening up their lending policies.  Meaning more small and medium sized businesses are being turned down for a loan. 

Business owners face several hurdles when it comes to applying for a bank loan.  First, the business owner must have a strong personal credit score.  As many business owners use their personal credit to help finance their business, this often results in a lower credit score.  Also, banks are looking at how long has a company been in business and been profitable.  The bank wants to see a consistent track record to assure them that the company can pay back a loan.  Documentation requirements are daunting since banks are federally regulated.  Personal and corporate tax returns, cash flow statements, financial documents and personal net worth statements are a few of the items required.

Staffing companies, IT companies, nurse staffing, manufacturers in Austin are finding that factoring is the solution.  Factoring companies buy their clients invoice, advancing 80% to 90% on day one. Since the factoring company is counting on their client’s customer to pay them back, the factoring company underwrites the credit strength of the customer, not their client or the business owner.  This means that business owners who have damaged their own personal credit scores by financing their business have a viable alternative to traditional bank lending.

The requirements to factor invoices is also less strenuous.  The factoring company wants to make sure that the companies’ customers are credit worthy, so a customer list and an account receivable aging will be required. 

American Receivable has helped Austin companies cash flow and grow for 43 years.  Using our streamlined application, we are often able to fund a company within 2-3 days! Next day funding for all established clients.  We our owned and operated by our original founders. We know what it takes to make a company successful.    Call today or complete our quick online application form to find out how American Receivable can put your company on the road to success.            512-339-5112                  800-297-6652


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