The lecture hall was packed, but students weren’t listening to a lecture; they were listening to what could possibly be their only chance at entrepreneurship: factoring programs.
It’s an old — and often misunderstood — strategy for young entrepreneurs whose capital and credit history aren’t as appealing to banks as they should be in order to qualify for loans.
Factoring programs allow for the advancement of funds for small businesses, such as those started by students, against an approved commercial invoice. The remainder is then given to the client once is the invoice is paid. These funds then assist small businesses by allowing them to raise capital, provide credit, etc.
For many students, factoring programs are the only options they have in financing their entrepreneurial projects.
In an interview after the lecture on factoring programs held on the Arizona State University campus, Robyn Barrett of FSW Funding, formerly Factors Southwest LLC, explained the interest of these young entrepreneurs in advancing their ideas and ambitions in the business world. “It’s great to work with people that are so passionate about their job, work and their company,” she said.
One of FSW Funding’s success stories involves a young man who came up with the idea of combining engineering and art to craft a product that he believes makes a difference: Refresh Glass. Refresh Glass products are entirely made from recycled glass. Thanks to factoring programs, Refresh Glass is now a growing business.
Robyn Barrett also says, however, that students must be prepared to take on these entrepreneurial projects, whether they are using factoring programs or not. Students must equip themselves with basic accounting principles. Barrett says that many entrepreneurial students lack these basic skills essential to their entrepreneurial success.
And so as student entrepreneurs walk through their graduation ceremony and their future awaits, they can now be more hopeful. Factoring programs may be an old and misunderstood strategy for financing, but it’s one they may be able to count on.