"In all my years of finance experience
I have found you as being the best source,
your personal touch and commitment to us has made our relationship a great blend of business
and friendship."
- J.O. CFO for Cable Installation Company

Businesses Choose Us
Again and Again

How Does Accounts Receivable
Factoring Work?
 
1. What is accounts receivable factoring?

Accounts receivable factoring consists
of converting a company’s accounts
receivable into cash by selling invoices
to a factoring company at a discount.

Accounts Receivable Factoring is
a valuable financing option for companies
who are just starting out or who
are experiencing a period of rapid growth.

Because accounts receivable factoring
companies rely on being paid by your customers,
your own financial history does not have
any bearing on your qualification.

Most importantly, accounts receivable
factoring allows your company
to stop worrying about cash flow
and start focusing on what really matters
in a business — operating it.

2. What does all of this factoring jargon mean?

Eight fundamental terms to you understand the accounts receivable factoring process better.

• Account creditor: another name for the client
• Account debtor: another name for the clients’ customers;
  the entity that the factor collects from
• Accounts receivable: money received or owed to the client
• Accounts payable: money the client pays out or owes
• Advance rate: the percentage of money that a factor advances its clients upon the sale of its invoices
• Discount fee: a fee that the factor charges when purchasing an invoice
• Reserve: the percent advanced, less the factor’s discount fee

4. OK, I understand the concept of accounts receivable factoring, but how does it work?

Factoring is a way to fill the gap between when a company invoices its customers and when it receives payment for its services. Describing the factoring
process can easily be accomplished by referring to a diagram, like the one below,
or by describing a short series of steps:

• The customer requests goods/services from X Company.
• X Company delivers the goods/performs the services.
• X Company issues an invoice to their customer, and then the invoice is sold to a factoring company.
• Upon verification of invoice, the factoring company advances cash on the sold invoice.
• X Company’s customer pays the factoring company.
• Upon receipt of payment, the factoring company will release the difference (reserve) between the collected amount and the advance, minus the factor’s discount fee.

5. What’s in it for me?

• Immediate access to cash upon the sale of valid invoices
• No liability on the company’s balance sheet
• Ability to eliminate unnecessary overhead
• Leverage off of the company’s customers’ credit
• Early payment discounts
• Build the business’ credit

6. But what will my customers think if I start doing business with a factoring company?

Although this is a common concern for many companies who are considering accounts receivable factoring, it need not be.

A lot of your customers may already be familiar with factoring. Accounts Receivable Factoring is one of the oldest methods of providing working capital to help businesses solve their cash flow needs.
In fact, credit card transactions are the most common form of factoring used today.
Some of the largest corporations in the world benefit from factoring millions of dollars of their accounts receivable every year.

Your customers will most likely view the factoring relationship positively because it demonstrates
that the company’s finances are secure enough to establish a line of credit. Working with a factoring company delivers an important message to your customers — that the business is solid, rapidly growing, and in high demand.

Finally, when a company establishes an active relationship with a factoring company, all parties benefit.
Your customers can continue to receive the business’ goods/services, and they can do it while waiting 30, 60, 90 days, or longer to pay. In the meantime, you get the benefits of having money today, therefore permitting a healthy business relationship on both ends


Why Businesses Choose Us
Again and Again

Same Day Funding

Advance Rates that Exceed
   Industry Norms by 20%
   We offer cash advance rates up to 97%
   The typical maximum in the industry is 80%.
   We can offer you higher advances because
   of our unique financing capabilities

Flexible Contracts-
   We provide you with contracts
   that meet your cash flow needs,not ours.
   
   Unlike the others, we do not make
   you sign long-term contracts and we don't
   charge you fees when you are inactive.

Invoice Processing
   Not only can we offer you the most
   advanced technolgy but we also maintain
   the old-fashioned systems because
   every client has different needs.

   Unlike the Others, our objective here
   is not to force you to conform to us,
   but to get you the cash you need
   in the quickest and most
   efficient manner.

Credit Management Services at No Extra Cost
   We provide credit analysis on both
   new and existing accounts. 
   We actually pull credit reports
   from various reporting services that
   we contract with and report back
   to you as to whether or not
   they are creditworthy

Experienced Account Managers
   We are seasoned professionals with
   an average of 11years industry experience per    account executive.   
   (Well above the factoring industry
   norm of 2 years)

Personalized Service
   You have one dedicated person and his
   or her assistant who handle your account.
 
   Unlike the others, with us you don't
   have to start over each time you call 
   with a new person

Please contact us today
   and our seasoned factoring
   specialist will help you
   get the cash you need TODAY

1-800-986-1854

Email Us
or complete the
On-Line Factoring Request Form

 

 

 

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