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Factoring vs. Other Financing
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Seeking financing from some funding sources can have significant long term implications to your business. Some sources may have undesirable requirements that are irrelevant to funders who factor. |
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|
Factoring |
Bank Loan |
Private Investor |
Venture Capital |
Going Public |
Leasing |
Federal Program |
Simple Application |
Yes |
No |
Possibly |
No |
No |
No |
No |
Retain Control |
Yes |
Yes |
Likely No |
No |
No |
Yes |
Likely No |
Retain Equity |
Yes |
Yes |
No |
No |
No |
Yes |
Yes |
Approval without good credit |
Yes |
No |
No |
No |
No |
No |
No |
Days to Fund |
3 – 10 days |
60 – 180 days |
15 – 90 days |
30 – 90 days |
120 – 270 days |
15 – 30 days |
60 – 180 days |
Reduce overhead |
Yes |
No |
No |
No |
No |
No |
No |
Grows with sales |
Yes |
No |
No |
No |
No |
No |
No |
Requires Personal Guarantees |
No |
Yes |
No |
No |
No |
Possibly |
Possibly |
Requires Profitability |
No |
Yes |
Usually |
Usually |
Yes |
Usually |
Usually |
Limited to Asset Value |
No |
Yes |
Possibly |
No |
No |
Yes |
Yes |
Requires On-going Monitoring |
No |
Yes |
Yes |
Yes |
Yes |
No |
Yes |
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