WHAT IS FACTORING?

Factoring is a transaction in which a business sells its invoices, or receivables, to a third-party financial company known as a “factor.” The factor then collects payment on those invoices from the business’s customers. Factoring is known in some industries as “accounts receivable financing.”

Three parties are involved when an invoice is factored:

Factoring allows your business to receive cash quickly on its receivables, rather than waiting the 30 to 90+ days it often takes a customer to pay. Factoring allows you to quickly build up cash flow, which makes it easier to pay employees, handle customer orders, and grow your business. Factoring enables you to receive a large percentage of the invoiced amount, typically 70-85% within 24 hours. Your industry, your customers’ credit histories, and other criteria determine the advance rate received.

 

For example, let’s say your company averages $100,000 in receivables each month. Usually, very little of that is collected at month’s end because customers wait longer than 30 days to pay. If you were to factor that $100,000 invoice, you would receive a cash advance between $70,000 to $85,000 in the bank at months’s end, instead of zero!

BENEFITS FROM FACTORING

 

Gain working capital without adding debt or diluting your equity

 

Early payment discounts from suppliers

 

Ability to purchase equipment to increase your profitability

 

Protect and improve your credit ratings

 

Increase your sales through credit extensions

WHO WE FUND

 

Start up to Fortune 500 Companies

 

Good or bad credit

 

Minimal operating history

 

Varying growth

 

Increase your sales through credit extensions