Home | Buying a Franchise | Finance | Operations | Marketing | Legal Corner | Free Newsletter
 
 

Accounts Receivable Factoring Source of Franchisee Funding

by Lanette Tucker

Factoring, especially accounts receivable factoring, can be the perfect tool for your franchise; not only can it help your franchise stay afloat and  secure essential funds, but also allow for you to take advantage of opportunities to expand. Although factoring might not be best for every franchise; it is a necessary tool for others. Here are some sample scenarios where accounts receivable financing is the best option a franchisee can have:

Great Tool for New Franchisees

It's hard to start a new franchise; a franchise' ability to secure vital funds might make or break the company. New franchisees can fail because they cannot obtain the necessary funding: they cannot secure any funding from banks, and their other spending options are severely limited.

In order to effectively raise money without increasing debt, franchisees should sell their accounts receivables. The last thing a new franchisee wants is more debt, something that would significantly hinder a company's ability to show a profit, inhibiting their capacity to borrow cash in the future.

Accounts Receivable Factoring Allows Franchisees to Grow Quickly

Franchisees can grow quickly if they correctly utilize invoice factoring: they can use the money from factoring their invoices to pay for necessary inventory expansion, or to start a completely new product line or division. Using accounts receivable factoring, franchisees can easily and quickly obtain funds, allowing them to re-invest in their franchise, drastically accelerating their growth.

Having Cash Flow Problems?

Problems with cash flow can stunt any franchise growth. If your company can't grow because you are having difficulty collecting on outstanding invoices, factoring may be just the tool you need, providing necessary money right away, allowing your company to continue operations and increase revenue.

Hard to Get a Bank Loan?

If your company cannot get a bank loan, factoring is a great alternative. Franchisees may not be eligible for a loan if they only have a few assets to use as collateral, or are fairly new and haven't turned a profit. In cases such as these, factoring will be able to deliver a large percentage of a company's outstanding invoices, typically from 75 to 90 percent.

Accounts receivable factoring delivers money right away, without having to qualify for a potentially nasty loan. Because factoring involves selling a franchise' invoices, they don't have to worry about repaying any bank, avoiding any further strain from loan repayment, thereby strengthening the company. If you are a start-up, or are fairly new, and would like to grow your franchise quickly, factoring is the best option available.

For additional information, contact:

Lanette Tucker Paragon Financial Group 200 SE 9th St., Ft Lauderdale, FL 33316 Phone: 954-524-4840 Fax: 954-524-3533 lanettet@paragonfinancial.net http://www.paragonfinancial.net

 
Follow Franchise Know-How on Twitter

 

 


 
 Vital Insight For Your Investment

 

Important Manual For Franchise Buyers
Endorsed By American Association of Franchisees and Dealers.

Franchise Buyer's ManualAre you thinking about buying a franchise? There's a lot you need to know before you invest if you want to be successful as a franchisee. My guide, The Franchise Buyer's Manual, is a self-help tool that helps you decide whether or not franchising is for you and teaches you how to get the information you really need to choose the best franchise opportunity. Click here for more information.


Corbally, Gartland and Rappleyea, LLP - representing the franchising community for over 30 years


 

American Association of Franchisees and Dealers 

   

 

 

Privacy | Disclaimer | Article Submission Guidelines

FranchiseKnowHow
PO Box 714
Stony Brook, NY 11790
631-246-5782
franchiseknowhow@gmail.com