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It is often said that factoring is an “off the balance sheet” form of financing, but what does that mean?

The term has relevance when compared to other forms of financing. More traditional financial tools issue debt in return for financing thus adding debt to the ‘liabilities’ section of the balance sheet. This affects the company’s debt to equity ratio, a key measurement of business risk, and can affect their ability to take on other forms of financing or even jeopardize their standing with current financiers.

One benefit of factoring that is seldom mentioned is that factoring offers dependable money.

What I mean when I say “dependable money” is that factoring allows a business owner to know exactly when payment will come in.

Even with the most …