Reference no: EM131721143

Question: Jackson Peterson has launched a firm selling swimming pool supplies. Most of his clients are local swimming pool builders and smaller firms that serve homeowners and a few businesses by cleaning their pools on a regular basis. While Jackson's firm is generating a reasonable amount of business, cash flow is a problem. A main reason for this, he thinks, is that most of his customers are also small companies and are struggling to have enough cash on hand to operate them-selves. In listening to Jackson, you determine that factoring might be a way for him to raise cash for his business. When you mention this possibility to him, he looks puzzled and says: "I do not know what you are talking about. What is factoring and why should I consider using it?" How would you answer Jackson?