Factoring Vs. Traditional Bank Loan

By November 27, 2018 August 16th, 2019 Factoring News

Whether it be through a traditional small business loan or invoice factoring, cash flow and working capital are typically very important to obtain when starting a business, especially in the trucking/transportation industry.

At Single Point Capital in Houston, TX, we focus on getting our clients capital for their business through invoice factoring. Here are some of the advantages of Factoring vs a Bank Loan

Factoring

  • Factoring is not a loan, so there is no debt incurred
  • Single Point can have you set up for our factoring services within 24 hours
  • Clients can choose to sell your invoices for specific customers or for specific lengths of time
  • Same day funding on invoices
  • Collateral is based on receivables only
  • Single Point is mostly concerned about your customer’s credit and not as focused on personal credit score
  • Full back office support and collection services on your accounts receivable

Bank Loan

  • Interest is accrued and the initial principle must be repaid
  • Getting approval for a loan or any line of credit can take weeks
  • Clients are typically locked in for years and failure to meet responsibilities can result in loss of assets
  • Access to cash immediately, but only to your credit limit
  • Collateral is on all assets
  • Approval typically requires cash flow statements, income taxes, financial plans, etc.
  • No assistance on invoice collection

Invoice Factoring is often misunderstood for being a costly manner of financing, but factors provide many additional services that banks do not. At Single Point Capital, we offer insurance services, compliance services, fuel discounts, free load board access, free credit checks, and even provide freight through our freight brokerage Single Point Logistics.