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Invoice Purchasing

What is Invoice Purchasing
Invoice purchasing can be extremely beneficial and an economical alternative for your business. Invoice purchasing is an ideal way for companies to release working capital tied up on invoices or accounts receivables. Factoring companies, who generally deal solely in invoice purchasing, agree to purchase your invoices at a slight discount.

Invoice purchasing is available to all kinds of businesses, whether you deal in multi-million dollar transactions or transactions with local "mom-and-pop" businesses. It takes only a little research to find the factoring package suitable to your needs. With a little guidance and advice from your factoring consultant, you will undoubtedly find what you need.

Will I Be Personally Liable?
The extent of your liability when you participate in an invoice purchasing plan depends on your agreement with the factoring companies. Factoring on a "non-recourse" basis means that the transaction is complete for the business owner when the invoice purchasing is finished. Henceforth, your business is essentially no longer involved.

If, however, your invoice purchasing agreement is factored on a "recourse" basis, the company remains liable. If the invoice is not paid within a specified period of time, generally, the business owner agrees to purchase the invoice from the factoring company. Presumably, the factoring companies charge a smaller percentage fee under this factoring structure.

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