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Factoring is very different from “traditional” lending. For one, it is definitely more expensive. But with the expense comes added flexibility and services that other types of lending cannot match. So this leads to the question: When is it a good time to switch to other types of financing?

To answer this question the business must first look at what financing options they qualify for. If factoring is their only option then it can help increase business volumes while building credit history, both of which may help the business to later qualify for a different, perhaps more ideal form of funding.

Small businesses in Los Angeles have recently taken a hit. Innovative Bank, one of the largest lenders of SBA loans in Los Angeles and nation wide, was closed by the California Department of Financial Institutions and their deposits were transferred to Center Financial Corp. Executives at Center have stated that they are not going to continue Innovative Bank’s high-volume small business lending and will focus on larger loans to bigger businesses.

The purpose and goal of a factoring arrangement is simple: Improve cash flows. That is the primary value that a factor provides to their clients. However, a factor’s value does not start and end with simply providing financing.  The factor assumes a host of responsibilities that are inherent and unique to this variety of financing.

Every aspiring entrepreneur dreams of one day starting their own business. And while they might dream of the days when it grows to become a large empire, the reality is that the entrepreneur will have to start small. Starting at …