I would use factoring as a last resort. If its a cashflow issue you are trying to solve go out and establish a relationship or harvest your existing relationship with your banker. I feel THERE ARE some great advantages to factoring, however, a line of credit could cost you much less in the long run. Think of it almost as a hard money loan. First understand, why you are in this situation of needing the cash now and determin what the problem is. I feel that EVERY business at some point should have a line of credit on reserve for the tough times. Right now we are seeing tougher times for many small businesses and I have clients using both methods. They happier one`s are the ones that got a line of credit and used it for emegencies.
Factoring can be great for a large job that just can up and you need to ramp up heavy equipment and staff but you`d get a better itnerest rate adn save more money long term trusting and using your bank.