Receivables factoring does have benefits. As a rule my payment terms are 50% down and balance upon completion. I RARELY invoice anyone. The only times I invoice are for established customers who I know dont nit-pick bills. They are the ones that will just call my office and say "1234 Smith street office complex" can you have Joe stripe that for us. No "I need 3 bids" no committee meetings, no long drawn out contracts. etc. I have a very small handful of those customers. They just call, give an address, and say "stripe it". I fax them my "short form contract" which is one page just authorizing the work. We do the work, send a bill, and I have a check in a few days. You cant beat a customer like that. Where receivables factoring would help is a scenario like this. I have a very large apartment complex company that I work for. They own a ton of complexes. Every sealcoating job for them is $40,000 +. Here is the problem: They WILL NOT issue a deposit. No exceptions. They pay 60-75 days after invoice. Now that goes totally against my terms, and I dont like it one bit. However.....They DO PAY. So im left to decide.....Do I want the job on their terms? Or do I let a competitor do it? Yes, the risk is huge. But so is the payout. If I do 2 of their complexes, I have to front 30,000 in material and wait 60+ days to get paid. My suppliers get paid at the end of the month. So either way Im out. A receivables factoring company would buy that invoice and pay me on the spot at a discount. So I get a little less money but I get paid now and they wait the 60 days. Its a great idea for some instances. I have a private person who does this for me so I dont need them but If I didnt have this guy, I would have no choice but to either find a factoring company or turn down the work because I dont usually have that kind of money to lay out.