When equity capital is made available to companies or investors, but not quoted on a stock market. The funds raised through private equity can be used to develop new products and technologies, to expand working capital, to make acquisitions, or to strengthen a company's balance sheet.

What is Equity?

Equity is a term whose meaning depends very much on the context. In general, you can think of equity as ownership in any asset after all debts associated with that asset are paid off. For example, a car or house with no outstanding debt is considered the owner's equity since he or she can readily sell the items for cash. Stocks are equity because they represent ownership of a company, whereas bonds are classified as debt because they represent an obligation to pay and not ownership of assets. 

How does factoring work?

1. Submit Application / Documents
2. Sign Factoring Agreement
3. Submit invoice for products sold or services rendered
4. Receive immediate cash upon verification of invoices

Factoring is the conversion of a company's commercial accounts receivable into immediate cash by selling those accounts at a discount. Factoring is not a loan. With factoring there is no interest to pay, nor principal to repay. No liability will appear on a company's balance sheet due to its factoring. A company simply sells one of its assets (accounts receivable) to obtain a more liquid asset (cash).

Since factoring is not a loan, funding is not based on a company's ability to repay the amount advanced. Rather, funding is based on the ability of the company's customers to pay what is owed the company for the purchase of the company's goods or services.

In addition, factoring provides to a company services other than just improved cash flow. By factoring, a company is in essence outsourcing all or a portion of its credit, collection, accounting, and monthly reporting. PESWA Financial Solutions performs these services for hundreds of companies, and we are experts at it. By supplying these services for our Clients, and giving our Clients the cash flow needed to grow, our Clients are free to do what they do best - run their business and increase sales.

With over $60 billion of receivables being factored in the United States annually (and that figure is increasing rapidly), factoring is a quick and viable way for companies to finance their growth.

We at PESWA Financial Solutions thank you for interest in us, and we hope that you find this package informative. Please do not hesitate to contact us if you need further information or help with your cash flow.