Inside Money Today

Lendinero's blog on Growing Your Business

Can Factoring Help Your Food Distribution Business

Can Factoring Help Your Food Distribution Business

Can factoring help your food distribution business?  Factoring is a great financial tool for both buyers and sellers of food products. Food Sellers If you are selling food products, you can increase your sales by having factoring.   Factoring will allow you to achieve the following:

  • Extended payment terms to buyers
  • Provide new financing options to new buyers
  • Increase clientele
  • Increase sales
  • Reduce your collection costs

Think of factoring in these terms.  If you have a car lot and people have to buy cash or have the option to finance which buying option are they likely to accept?   The majority of autos in the U.S. and around the world are financed.  The same applies to other industries such as residential real estate.  Most properties are financed.  Factoring allows you to do the same with your business.  Factoring is a financing tool that allows you to sell more by providing financing to your buyers.  Even though the factoring companies approve your company for financing the buyers also need to be approved.  It’s a two way street.  Factoring will not work unless if your buyers are approved.  Why?  The buyers are the ones that need to pay your invoice and factoring companies are purchasing your purchase orders or your account receivables.  In the end the buyers of your products are the ones that need to pay the factoring company.   Factoring can help food distributors increase sales if you have good buyers that are credit worthiness.

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