Dallas Blog - Metroplex Directory

FOR IMMEDIATE RELEASE
Contact:
Arthur Ladd
South West Dir.
1320 E. Marvin
Waxahachie, Tx, 75165
Phone: 972-937-3978
http://www.amerifund-capital-group.com
http://www.loansonstock.com
Business Invoice Factoring
Factoring Discount Fees vs Bank Rates
Waxahachie, Tx — July 25 2005 — In some quarters factoring is not considered an inexpensive service especially when clients incorrectly compare the cost of factoring to traditional bank loans or revolving lines of credit. Clients tend to annualize the monthly discount fee comparing a 3% per month transaction to a 36% per year cost of money. This is an erroneous comparison as factors purchase invoices at a discount and do not lend money.
You could, of course, compare the discount rate to the annual cost of providing a customer with terms of 2/10 net 30 rather than straight net 30-day terms, a method used to speed cash flow. That totals 72 percent for the year but are you actually losing 72% (2% x 36 = 72%)? Of course not! That would be an erroneous comparison as well and offering such terms does not guarantee payment and oftentimes creates massive public relations problems as most debtors will take advantage of the 2% discount and still pay in 30 or more days. As an alternative, if you can’t or don’t want to wait 10, 30, 60 days or more to get paid, and believe you can earn more on your increased sales than the discount rate you’ll be paying, than discount factoring should be a safer, more flexible cost effective solution to your cash flow problems.

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For information: http://www.amerifund-capital-group.com
Contact: cashflownow@sbcglobal.net
Phone: 972-937-3978