Where do you go after the Bank says "NO"? Friends? Relatives? Customers? Credit Cards? Not likely. Most banks are typically looking for a borrower's ability to repay a loan based on the company's cash flow or individual borrower's income and assets. Generally, banks are looking for the following criteria to grant a loan or line of credit:

• Minimum 3-5 years in business
• 2-3 years of positive cash flow
• Available assets at least equal to the loan amount
• Available personal assets equal to the loan amount
• Clean and strong credit history

Factoring, as an alternative source of financing your company's growth, eliminates many of the bank's requirement that are difficult to meet. Furthermore, assuming you can get a loan for the initial start up capital or for ongoing operations, what are you going to do after you've spent those funds? You are still going to be waiting for the invoices to be paid.

The biggest problem with bank financing or financing via your credit cards is that once you've reached your maximum credit limit, you're stuck and out of luck. Where as banks lend primarily based on cash flow and collateral (your ability to repay the loan) and establish an absolute maximum they will lend you, Factors provide cash based on the quality and liquidity of your assets... primarily your accounts receivable. Factors primarily look at the quality of your accounts (the credit worthiness of your customers and the validity of your invoices) which allow them to provide financing even if your company is new, or your credit history is weak, or if your cash flow is a little slow. Because each account is evaluated individually, a Factor has much more flexibility than a bank when it comes to keeping up with an increase in sales. Here's how factoring differs from traditional bank loans:

• No lengthy applications
• New companies are acceptable - Credit problems ok
• No financial audits - Short approval process
• Short or long term programs available
• No compensating balances required
• Cash in 48 hours or less
• Approval based on the credit of your clients - not you
• Your credit line grows with your business