Factoring Invoices vs. Bank Loans

Many believe that factoring invoices with a factoring company in Houston is just like taking out a bank loan, when in fact; both forms of financing are very different.


Bank Loans

Every business owner understands the impact of a business loan. Financing is based on credit history and individual operations. While this traditional means of gaining capital may feel comfortable, it does have its drawbacks. Obtaining financing through a bank loan may be simple for some seasoned businesses, but a start up will likely find this process more difficult. Not to mention, increasing your credit may not be feasible in the early stages of your business. With a bank loan, payments – plus interest – are made over time and your funding is capped at a certain amount.


Factoring Invoices

Factoring is often an option for companies that have difficulty getting financing through traditional means, such as start-ups. In fact, many bank loan officers will send clients to factoring companies in Houston. First and foremost, factoring does not produce any debt to be repaid. You simply go through the application process, gain approval within 24 hours, and funding begins immediately. There is no cap on the amount of funding potential and approvals are based on the credit history of your clients. One of the best things about factoring invoices is the flexibility and speed. Once an invoice is submitted, money is transferred almost immediately to you via wire transfer. It is up to you as the business owner to decide which invoices get factored and how often factoring should take place. You are in control, not the bank.


If you are interested in exploring financing options through invoice factoring, give Crown Financial a call today. With over 25 years of experience, our team is well equipped to handle your accounts with the quality and expertise you deserve.


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