Small businesses 'factoring' cash needs

J. Michael Stanley, left, managing director of factoring

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J. Michael Stanley, left, managing director of factoring company Rosenthal & Rosenthal, with a client, Evan Cagner, president of BCNY International, at Cagner's office in Hicksville. (July 17, 2012) (Credit: Heather Walsh)

With bank lending tight, small businesses on Long Island are exploring factoring, a financing method that used to be considered a last resort.

Factoring is not a loan, although it does provide cash to companies that don't want to wait to receive payment from their customers. In factoring, a company sells its receivables, or invoices, to a specialized financing firm, called a factor, which...

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