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Bank loans have been harder to come by, but that doesn't mean companies' need for funding has dried up. To get cash, small and medium-size businesses have increasingly turned to firms that get them money they are owed more quickly.

The firms, known as factoring companies, say they are seeing an uptick in the quantity and caliber of businesses coming to them for funding. Traditionally used as a kind of short-term cash bridge, factoring has been avoided by some businesses in the past because it can cost more than traditional bank financing. But these days more firms that need funding -- ones that are growing quickly, are working out financial difficulties or have no assets to borrow against -- are selling their bills to factoring companies.