small BUSINESS FINANCING    12/01/2017

Business Growth Factor™ named
“Small Business Capital Strategy of the Year”

Business Growth Factor™ was named “Small Business Capital Strategy of the Year” for 2017 by Small Business Reports. publishes ideas, trends and features to help small business owners prosper and grow.  


Financial tech reinvented the oldest form of business financing, historically known as factoring.

Fixed fee short-term working capital with daily repayment is the new name.

Early Americans including George Washington and Thomas Jefferson used factoring to finance their tobacco crops.  Factoring also was the key to the growth of the cotton industry.  A trading partner would purchase a portion of next year's crop at an appropriate factor rate, providing the farmer with working capital for immediate needs.

This flexible business capital strategy is not available from banks because it is not a loan product.  It is experiencing a surge in mainstream adoption by business owners who need working capital for any reason but were turned down by their bank for a traditional business loan.

Access to short-term money for working capital is critical to small businesses that need to consolidate debt,  smooth out cash flow, make necessary purchases of equipment and inventory, expand to keep up with growing demand, or for any reason.  

Business Growth Factor™ is a new improved business capital strategy that was developed and tested over the last ten years, but 80% of business owners have not yet taken advantage of it or may not know about it.  


By using your future revenue or receivables and cash sales as assets, you can qualify your business for up to $500,000 of working capital within hours.   It is fast, flexible and hassle free.

You don't need perfect credit or an abundance of collateral. It is simply a discounted sale/purchase your future revenues or daily cash sales upfront in return for immediate cash your business needs in as little as two business days. Once funded, daily repayment is with automatic ACH debit of a fixed amount from your business checking account.


It is NOT to be confused with an older different product called merchant cash advance in which repayment is via third-party split of a percentage of payment card processing from each credit card batch.  This is not recommended in most cases because of separate third party involvement which can cause problems and is expensive.   

Fixed fee short-term working capital provides small businesses with easy access to money when they cannot wait or do not qualify for a conventional bank loan.  

The product was created and evolved steadily because banks stopped making loans under $1 million to small businesses.

Traditional lenders decline 75% of loan applications from small businesses, and that rejection decision can take weeks. Numerous regulatory and administrative constraints discourage banks from approving business loans for less than one million dollars.  

It costs a bank the same amount to process a loan application for $10 million as $100,000. And they also see the smaller business loan as inherently more risky.  Banks are focused on larger businesses and loans over $1M.

A fast flexible capital strategy gives business owners fast easy access to non-bank financing up to $1 million to quickly solve problems and seize opportunities within days, not weeks or months.


Long ago, before banks and computers, whenever a business owner needed immediate capital to solve an unexpected problem or to seize a sudden opportunity, a Factor would offer to purchase the future value of receivable invoices from the business at a discounted present value.

The Factor then collected the future value of the invoices when due from the business’ customers. The Factor's profit reflected the length of time waited and the risk of possible defaults.

However, that is why – until now – factoring could be used only by businesses with existing sales already invoiced to other businesses as receivables.

Now, with new financial tech and streamline processing of data to assess risk and the strength of the business, a Factor will purchase future sales as assets.

All types of small businesses are realizing that their future revenues are an asset.


In 2017, non-bank financial tech has pioneered artificial intelligence algorithms for instantly analyzing financial documents, bank statements, industry information and public data to assess potential risk and predict loss.  Factoring has awakened an entirely new market opportunity, and it works completely differently now.

Today, a Factor is an institutional investor – not an individual or a bank.

The Factor purchases a discounted dollar value of future sales revenue. The business owner receives a cash direct deposit in return for repayment terms auto-debited as agreed until the contracted future value is fully paid.


Fixed fee short-term working capital looks like a loan. But it is not a loan, nor is it online lending. There is no interest rate, no annual percentage rate (APR).

Instead of a signing a Note for a loan, the business enters into a Receivables Purchase Agreement with the Factor.  The cost of money is determined by a factor rate, the fixed fee.

Repayment is daily with auto-debit Monday-Friday or weekly from the business checking account via Automated Clearing House (ACH) electronic payments until the full future value has been paid to the Factor. 


The true cost of money is nearly impossible for most borrowers to calculate accurately for conventional bank loans.  The interest rate by itself does not reveal the actual cost of the borrowed money.

A loan with a low interest rate and a long term can be more expensive than the same loan with a higher interest rate and a shorter term, and that’s not counting fees and costs that often are not clearly disclosed by the lender.

A Factor's fixed fee is determined by non-bank financial tech algorithms which typically range from 1.20 to 1.45 depending on a host of data considerations such as revenue strength, industry, creditworthiness, years in business, length of term, etc.  There also can be an origination fee deducted from the disbursement.

For example, the business owner might receive $100,000 at a fixed fee of 1.25. Repayment will be $100,000 x 1.25 with daily payments calculated M-F for 15 months.

There is no cost to apply, no upfront fees, no hidden charges. And the application has no effect on the business owner’s credit score.

Usually, there is a prepayment discount or rebate for early repayment of the balance..

Further, there is no collateral required and no personal guarantee of repayment if the business defaults.  The business owner may be asked to personally guarantee that all the information provided is true and correct.


Fixed fee working capital such as Business Growth Factor™ provides easy short-term money within one or two days for sudden opportunities or emergencies. Flexible terms can be from 6 months to 24 months. Funds can be used for any reason: inventory or marketing, taxes or unexpected expenses, equipment or seasonal hiring, expanding the business.  

For most small businesses, especially those with credit challenges, fixed fee funding  is an excellent capital strategy because quick decisions are primarily based on revenue strength and growth, not FICO scores.


(415) 878-6276



Small Business Reports   (415) 878-6276
educational information resource

No products or services are offered or sold on this educational information website  is an educational business information resource
Editorials, opinions and articles are not a solicitation or an offer to sell, refer or arrange financing. The features in this publication do not promote or sell products, goods or services. does not receive any sales commissions or referral fees.

IMPORTANT INFORMATION: This is not investment, financial, tax, or legal advice. If you have questions, please consult your own attorney, tax accountant, financial advisor or other appropriate professional having expertise in the area of your question or before making important decisions in these areas. This website assumes no liability whatsoever for any information that is communicated or quoted by its sponsors or sources.

© Copyright 2010-2018  All Rights Reserved 

Use of this site constitutes acceptance of our user agreement and privacy policy, California privacy rights   User Privacy Policy   The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Small Business Reports.