When business owners realize they have a cash flow problem and start looking for ways to solve it, the first thing they usually do is call their banker or the SBA.

The second thing they do is discover all the financial and credit information they will have to provide and how many weeks or months it will take to find out if they are approved.

Bankers decide what a business qualifies for by the value of the assets they own and can use as collateral. Many businesses don't have many assets, therefore the loan or line of credit they qualify for is not what they need. Even a business with many assets often can not borrow as much as they need to keep everything running smoothly on a continual basis.

Funds available through factoring are actually unlimited, in the sense that they are based on how much business you do and how much you can do in the future. The assets you use as collateral are the accounts receivable you generate for goods or services you have already delivered. That means the amount you can get each month depends on the amount of work you delivered the previous month.

In order to qualify for a bank loan, you have to be in business long enough to establish good credit and show financial statements that will allow the banker to feel that you can repay the loan out of your company profits.

If you haven't been in business very long, are in Chapter 11 or have tax liens, you wouldn