What is Receivables Factoring – Short Term Cashflow

Receivables factoring, also known as accounts receivable factoring, is a financial transaction between a business and a factoring company. In this transaction, the business sells its unpaid invoices or accounts receivables to the factoring company for an immediate cash payment. The factor then collects on those invoices from the customers in the name of the business.

The main benefit of receivables factoring is that it provides businesses, such as gym and fitness clubs, with access to short term cash flow that would otherwise not be available due to delays in customer payments. This can help businesses cover operational costs or invest in necessary resources such as inventory or new equipment.

In addition, since the factor charges fees for its services based on a percentage of the amounts collected on behalf of their clients, there is no additional risk exposure for businesses who use receivables factoring as part of their financing strategy.

Receivables factoring can be especially useful for gym businesses who may not qualify for traditional loans or have difficulty finding other sources of credit. It is an attractive option given its easy application process and ability to provide much-needed capital quickly.

If you would like to discuss receivables factoring and find out if it is a good option for your fitness club, give us a call at 844-417-7217! We would be happy to help.