Rainmakers Press Release
For Immediate Release: October 30, 2008
Contact: Doug Terry, FWB Capital Group
Phone: 317-797-0572
E-mail: DougTerry@FWBCapitalGroup.com 

Indianapolis, IN: October 30, 2008 – With traditional lenders like banks and credit unions clamping down on loaning money during this current recessionary time, how is a business going to solve a possible cash flow crunch? The practice of factoring is becoming an increasingly viable option as a way to keep companies growing during these choppy economic times. It's not what you were taught in math class, but factoring is an answer to a mathematical money problem.

Many Fortune 500 companies use factoring. Factoring is a financing option whereby a business sells its Business-to-Business or Business-to-Government accounts receivable or customer invoices at a discount to receive immediate cash. With factoring, a business can get money faster - usually within days - and with more flexibility than traditional financing. It has become a $200 B industry in the United States alone.

"Factoring is a well established form of financing that has helped businesses grow rapidly and sometimes avoid bankruptcy because of slow paying customers of goods and services," says Doug Terry, a financial consultant for FWB Capital Group, who has helped numerous Indianapolis businesses get the needed funds to make payroll, for instance, through factoring. "In these tough times, factoring is much more available than customary sources."

How the process works is that a business will sell some or all of its customer invoices to a factoring source to get paid immediately, instead of waiting 45 to 60 days for a debtor to pay. The factor will be responsible for recovering the total value of these invoices at a later date. The business pays the factor a fee for this transaction.

"It's a win-win for all because the monies are exchanged in a timely manner for the business to meet its immediate financial obligations, like paying its suppliers," adds Terry. "It also doesn't force the business to take out a long term loan or use high interest credit cards to cover costs. It is a short term solution involving the swapping of two assets business to business."

The factor can also provide credit insurance, accounting, bill collecting and other administrative services to help small businesses grow without having to hire additional personnel. There are no long-term contracts and banks even make factoring referrals to help their business clients stay in business.

"When businesses consider all of the "back office" services factors provide and with the proper use of these cash advances, many companies consider factoring a low or no cost method of financing their operations," Terry says.