What is Factoring 2.0™?

Factoring was one of mankind’s earliest financial inventions, dating back to more than 3000 years. It has evolved significantly since then, but even today the core concept remains the same: selling the merchant’s receivables for an advance cash payment. Yet this approach is best suited to larger merchants dealing with even bigger companies.

Factoring 2.0™ solves the challenges that small business owners have historically faced when trying to obtain financing through factoring. Through Factoring 2.0™, we have expanded the focus of traditional factoring in order to meet the requirements of small business owners.

Here is how Factoring 2.0™ differs from traditional factoring:

1. Cash flow-based decision

In traditional factoring, the factor (the company providing the capital) makes its decision based on the applicant’s clients. However, small businesses often have a large number of clients (i.e., consumers) whom are difficult to value using traditional methods. With Factoring 2.0™, we handle all your clients as a single entity; we make decisions based on your company’s cash flow as well as hundreds of other factors.

2. Accepting future receivables

Like other factoring companies, we are interested in buying your already invoiced receivables; however, we also take it a step further: We also buy your future receivables. The advantage of this is that you will be eligible for more capital using the Factoring 2.0™ method.

3. Decision not based on your credit score

We at 48 Factoring do not believe in the traditional credit score; instead, we use our own proprietary internal risk assessment algorithm based on approximately 800 factors. In other words, your credit score is only one of these 800 data points—and not even a very significant one. Although we do not disclose how our system works, we can tell you that it is primarily on your company’s projected and past performance, not your personal credit history.

Based on these differences, Factoring 2.0™ is perfect for small business owners who need working capital fast and do not want the hassle of dealing with a bank.