Accounts
Receivable Factoring Still Available
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| Factoring Companies want to give you money! |
In this turbulent
economy financing options for small businesses are very limited. Traditional
financing through banks is difficult to obtain. Other secondary alternative
sources such as micro lenders, credit unions, and economic agencies are
available, but often take weeks to put into place. By factoring invoices or
utilizing accounts receivable factoring, you can be approved quickly and have
access to cash against your outstanding invoices within days. We can structure
your financing to include all your invoices or selective ones that you choose
to give you the working capital you need. Factoring can even be utilized while
you are waiting for approval on other financing.
How can factoring
invoices help my business?
By factoring
invoices on your government and/or commercial contracts, you will receive funds
on your invoices as they are issued, so you don’t have to wait 30, 60, 90 days
to get paid. This increase in cash flow
will enable your business to take on new and larger opportunities and sustain
you through periods of growth. Our
factoring services are readily available to newer businesses as well as long
established businesses with the focus of credit on your customer, not yours. It
can be put into place in 1-2 weeks.
Benefits of
Factoring Invoices and Accounts Receivable Financing
Benefits of
accounts receivable factoring include increased cash flow and improved working
capital. Proceeds from factoring can be used for various reasons including
payroll, taxes, marketing, vendor discounts, ongoing expenses, but are
particularly beneficial when a company is in a growth stage and moving to the
next level of success. Factoring can be used by a wide variety of industries
including staffing, manufacturing, distribution, transportation, contractors,
and more.
Quick Factoring
Invoice Example
A company
provides goods or services to its customer. Once an invoice is issued, it is
“sold” to a factoring company (factor) who advances a percentage of the face
value of the invoice. This advance
(typically 70%-90%) is usually received within 24 hours of issuance. When the
invoice is paid 30, 60, or 90 days later, the remaining balance is paid less a
transaction fee for the use of the funds.
The advance rates and fees are agreed upon by both parties prior to the
initial funding. During the approval process, credit worthiness shifts from the
business owner and company to its customers who are responsible for payment of
the invoice.
Example of
Transaction
Company ABC
issues a $10,000.00 invoice to Company XYZ for goods delivered. Terms are net
30 days. On Day 1 when invoice is issued a copy is sent to the factor who
verifies that goods have been delivered to XYZ and invoice will be paid
according to terms. After this is done (usually same day or next day), 80% or
$8,000.00 (depending on agreed upon advance rate) is paid to ABC. When the
invoice is paid 30 days later by XYZ to the factor, the $2,000.00 balance is
paid to ABC, less the transaction fee.
