Factoring Company. Nobody,but nobody has our flexibility to meet your needs

Factoring Receivables Solutions, Inc.
 60 years experience in providing factoring receivables funding
for companies in all industries nationwide and internationally

Your Factoring Benefits!  Comparison of Factoring toTraditional Funding  
How Factoring works  Factoring History  Is Factoring For You  Medical Factoring Construction Factoring
On-Line Factoring Request Form  Factoring Home Page
 

To talk with a member of our sales team,
please contact one of our regional offices at:
Toll Free:  888-266-0197
and ask for Natalie or Andrea
Email Us

Comparison of Factoring to Traditional Funding
Factoring Leasing Going Public Venture
Capital		 Bank Loan Private Investor Gov't Programs
Simple Application Yes No No No No Varies No
Requires Personal Guarantees
No
Possibly
No
No
Yes
No
Possibly

Days to fund
3 to 10
15 to 30
120 to 270
90 to 180
60 to 180
15 to 90
60 to 180
Approval based on prospect's credit
No
Yes
Yes
Yes
Yes
Yes
Yes
Funding tied to
sales
Yes
No
No
No
No
No
No
Give up equity No No Yes Yes No Yes No
Give up control No No Possibly Yes No Possibly Possibly
Limited to
asset value
No
Yes
No
No
Yes
Possibly
Yes
Requires profitability
No
Usually
Yes
Usually
Yes
Usually
Usually
On-going monitoring No No Yes Yes Yes Yes Yes
Reduce overhead Yes No No No No No No
Factoring Leasing Going Public Venture
Capital		 Bank
Loan		 Private
Investor		 Gov't Programs
But Isn't Factoring Expensive?
Assess the Costs By
Looking at the Benefits

Too often potential clients will begin the factoring decision by looking at factoring discounts (percentages) on an annualized basis, like a car loan or a mortgage.

They take the 4% they are quoted, annualize it (multiply by 12) and respond with "you are going to charge me 48% interest!" At first that may seem like a factual, pertinent statement. However, we deal in short-term funding, our average invoice pays in 42 days.

When they respond that it is still "48% interest" we ask them to look at the 2% they offer for quick payment. That 2% discount is for payment in 10 days. In a year there are thirty-six 10-day periods--------using the annualized percentage parallel, "that's 72% interest! Are they paying 72% for quick payment? No, and factors don't earn 48% for funding, either.

Why? Because factoring is short-term paper. To compare it to a long-term note is like comparing apples to oranges. In the end, the decision to factor always comes down to a business decision. If this money is going to cost 4%, can you take the money generated by factoring and earn more than 4%? after all, nobody factors just to have the money in their checking account.

Most businesess must weigh the costs of factoring against the costs of not doing it. Most often the decision is between factoring and putting up with cash flow problems.

If you are missing out on sales opportunities because of a lack of cash flow, be sure to consider that lost revenue when weighing the costs of factoring. Consider what increases in profits you can achieve with additional cash flow.

For example, in your current situation, without factoring, you have gross revenues of $100,000 a month. Your cost of goods is 65% resulting in gross profits of $35,000. Subtract overhead at 32% ($32,000) and you are left with a net profit of $3,000.

Now, consider what additional cash flow would enable you to do, such as take additional discounts for volume purchases, increase your sales and advertising effort, or add a second shift. By factoring the first $100,000 in receivables, we can project a doubling of revenue to $200,000 with a consistent 65% cost of goods (although this may actually come down depending on if you can receive discounts for paying in cash). This puts your gross profit at $70,000. Subtract overhead of $44,000 (which is more, but never double) and the cost of factoring----$6,000----and you are looking at a net profit of $20,000.

So how expensive is factoring?
In this instance, which is more than typical than not, the decision not to factor would have cost you $20,000 in missed opportunity for one month. So how expensive is factoring?

To accurately figure your profit margin with factoring, you must take into consideration the full spectrum of services offered. This is especially true if you are comparing factoring to borrowing then you are probably on sound ground. If you are looking to use the proceeds of factoring to pay overhead, to clean up bad debts, to pay past due cost-of -goods invoices, then you need to look carefully at what you are doing. Will this increase your chances of growing and expanding?

It is rare that companies decide not to factor because they could not afford to. As a matter of fact, in most cases, companies decide to factor because they can't afford not to.
Are they paying 72% for quick payment? No, and factors don't earn 48% for funding, either.
Note: A written promise to pay a named amount to a particular company or business by a certain date.
Most often the decision is between factoring and putting up with cash flow problems.
Consider what increases in profits you can achieve with additional cash flow.
Typical Income Statement
Gross Sales
- Cost of Goods
Gross Profit
Gross Profit
- Expenses(Variable & Fixed)
Net Profit
Income Statement without Factoring
Annual Revenue: $_________
Cost of Goods: $________
Gross Profit: = $_______

Expenses:
Fixed: -- $_______
Variable: -- $_______

Net Profit: = $_______
Income Statement with Factoring
Annual Revenue: $_________
Cost of Goods: $________
Gross Profit: = $_______

Expenses:
Fixed: -- $_______
Variable: -- $_______
Factor's Fee: -- $_______

Net Profit: = $_______
Analysis Sumary

Please complete our form so that we can help you determine your options.
Click here for the Information Form
or
Call or email me now for your FREE no obligation analysis of your cash flow needs.

To talk with a member of our sales team,
please contact one of our regional offices at:

Toll Free:  888-266-0197
and ask for Natalie or Andrea
Email Us

On-Line Factoring Request Form
Net Profit After Factoring: --$________
Net Profit Before Factoring: --$________
Additional Profit: = $________

Percentage Increase: __________%