A Brief History of Factoring Around the World
Companies across Texas use invoice factoring to help improve their financial situation when times become difficult. Although financial problems may seem like modern issues, the truth is that businesses have always felt the pinch of cash flow when hardship arrives.
Throughout history, businesses have needed a helping hand from factoring to help bring them back to their feet and rise even higher. Here’s a look at the history of factoring and how it became the financial solution for countless modern businesses in need of cash.
Factoring is an Ancient Profession
So how old is factoring? The truth is, it’s one of the oldest professions out there. Let’s start with the Roman Empire. Back then, it was difficult for a business to spread its wings and reach new customers across the seas.
Roman farmers used “factors” to help them complete financial transactions between distant customers. Not only were factors useful when business was good, but when a farmer had a bad crop season, factors helped maintain cash flow through expansion that relied on a farmer’s successful produce. This allowed farmers to continuously work on generating a better crop in the next season while also growing their financial gains.
Expansion Throughout Europe
The Age of Discovery also saw the British Empire rely on invoice factoring as it began to expand its horizons through the East India Company and Hudson Bay Trading Company. Much like business owners of today, these trading companies could not be everywhere at once to collect on orders placed in far off lands. So, debts were paid through the use of invoice factoring in order to prevent a decline in cash flow.
Invoice Factoring Comes to the United States
Invoice factoring was all part of how the United States became home for the citizens on The Mayflower. The journey itself was financed through invoice factors, and the practice quickly became the norm in America as trade in the new world became prevalent.
How Invoice Factoring Helps Your Business Look to the Future
Today, invoice factoring is a much more precise practice than how our ancestors utilized the method. Factors are no longer wandering individuals. The industry has grown into invoice factoring companies that provide alternate funding solutions for businesses within their local cities. With invoice factoring, unpaid debts are settled quickly, and aside from a nominal fee, the cash flows directly to business owners without the stress of unwanted debt that comes with personal loans.
With invoice factoring, businesses can turn to the future and start to develop physical expansions, hire qualified employees, and continue to provide excellent services to their clients. The future is brighter with invoice factoring on your side.
Secure Your Business’ Success With Goodman Capital Finance
Unfortunately, cash flow will always be a problem for newer or struggling businesses. However, Goodman Capital Finance is always prepared to lend a helping hand through our invoice factoring and asset based lending services. Contact us today to learn more about these financial solutions and to get the process started.