“FINANCIAL FACTORING: A DISCUSSION OF
RECEIVABLES FACTORING
AND ACCOUNTS RECEIVABLE FINANCING”

A brief history of factoring

The origin of financial factoring is centuries old. Civilizations throughout history have practiced some form of receivables factoring. From the Romans, who were the first to sell promissory notes at a discount, to the American Colonials, who prospered largely through the ability to be factored by European merchant bankers. Although the basic principles of accounts receivable financing have remained the same, the practice of receivables factoring has changed through the ages. In today's intense business finance environment, banking practices make it difficult for young, and even well established, businesses to get accounts receivable financing. That is why factoring is the best choice for alternative finance.

A general discussion of factoring

Financial factoring is an age-old financial practice that has many names.
It is frequently referred to as receivables factoring or accounts receivable
financing, invoice discounting or invoice finance. It allows businesses to sell
outstanding invoices to a factoring company, like Praxis Capital, and immediately
receive cash for working capital. The immediate injection of cash will assist you
in strengthening your company's daily operations and improving your financial situation.

Financial factoring is not a loan. It is a financial structure in which businesses sell outstanding invoices to a factoring company for immediate cash. Although some may refer to this practice as accounts receivable loans or factoring loans, these are misnomers. When your company decides to participate in accounts receivable financing you are electing to take an initial advance of monies for selling your accounts receivable to the factoring company. In simpler terms, you are taking
a cash advance, not a loan, as a down payment for the sale of your receivables
to the factor. When your client pays the final invoice, you receive the balance after the factor deducts its advance and fees. And the best part about receivables factoring is that it is your customer's credit, not your own, that is most important
in qualifying for accounts receivable financing.

So, if your business sells quality products or provides reliable services to other businesses on credit terms, you can factor with Praxis Capital.