Actually OT is correct Christy. Factoring isn't as bad as people are trying to make it out to be. The fallacy of 48% being wrong I just disproved on another post. The rate is in fact 4% APR no matter how you want to spin it.
Factoring isn't that unsafe for the Banks taking it, it's just a secured method of making a loan. They are banking on the people owing on the invoices paying them as opposed to the company making the sales to pay the amount. The chances of being stiffed by collection of companies that bought product to being stiffed by one company distributing to those companies is significantly less.
In a nut shell if a company gets $960 for $1000 in invoices it's 4% period. They pay a one time free for the money. When they turn in another $1000 in invoices they get another $960 @ 4%. That doesn't add up to 8% since they have now recieved $1820 for $2000 worth of invoices. Still 4%.
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