What IS Accounts Receivable Financing/Factoring?

What will my customers think?

For some people this question is the most important issue. Generally, most finance companies will want the customers (or debtors) to remit directly to them. In today’s environment, where factoring is more widely known, this seldom causes a problem. However, a well managed factoring company will typically have a Non-Notification program available for those situations where it is warranted.

Either way, factoring clients should take the time to inform their customers that a planned change with remittance on their invoices will be taking place. Good business people know the value of open account terms and the importance of maintaining and enhancing terms. Factoring can help to ensure that everyone is paid on time. If clients, customers, and suppliers all cooperate, it becomes a win/win where everyone benefits.

How does factoring work?

• The factoring company purchases your approved commercial accounts receivable once the goods are shipped or services are completed;
• They provide no-cost credit checks on all new and potential customers to help alleviate debt risk;
• They handle the invoices, mailing, processing, and postage at no additional cost;
• They provide timely aging reports so you always know the status of your accounts receivable at any time with on-line web reporting;
• They provide up-to-date account information, customer balances, and detailed reports via the web, as well as providing the ability to monitor delinquent accounts 24/7;
• They offer professional accounts receivable management and collection services on your factored accounts;
• They do not require long-term contracts.

What kind of industries can use factoring?

Any business engaged in creating business-to-business accounts receivable needing cash flow financing of $25,000 to $3,000,000 with minimum monthly billings of $25,000.

How can I qualify for factoring when my business does not have a strong financial record, and I have declared bankruptcy in the past?

Even if your bank would not give you a loan, we make our determination about your business based on the creditworthiness of your customers, not your credit rating.

Need I factor all my invoices?

No. It's up to you what you want to factor as long as you reach the monthly minimum of $25,000 in receivables.

My profit margin is so slim that if I were to factor, there would not be any profit left on the balance sheet?

Not so! The concept of factoring is to use your factoring funds to generate more revenues for your business. We can demonstrate that fact for you with a proposal for your review at no cost and no obligation.

Isn't factoring only for companies that are in financial trouble or relatively small?

This is a common misconception. A good example that dispels this myth is the fact that a major corporation once factored $750,000,000 to raise needed capital for growth.

How can factoring work for me?

By providing . . .

• financial strength and stability for your company
• US offices coast-to-coast, in Canada and Worldwide
• Individualized service that is professional and unparalleled
• Over 35 years experience serving small-to-medium sized businesses
• Numerous programs and flexibility designed to meet the specific needs of individual companies
• Funding from $25,000 to $3,000,000 per month
• Web access to your accounting records that provide "real time" reporting of your accounts receivable
• the most competitive rates available

Are my invoices liened as collateral?

Yes, they are. The factoring company requires first position on invoices you have submitted to their accounts receivable financing program. In some instances they may elect to work with a bank or SBA lender who is also financing your end client. In these cases, the bank must be willing to subordinate its position on the accounts receivable.

How much does it cost?

The rate and structure are determined by the risk (industry plus creditworthiness of your customer - not your credit), the length of time the money is outstanding (cost of funds), maintenance (monitoring the collateral) and volume. It can be as cost-effective as 1% on your receivables without showing up as a debt on your balance sheet. Once we can confirm your customers' credit rating, we can offer you a personalized factoring program designed to improve your revenue, credit standing and future profits. This customized proposal is at no cost to you.

Once you have decided that you are interested in a factoring option, a dedicated advisor will work with you to ensure your factoring success.

For comments from satisfied clients, please read Testimonials!

If you are ready to apply for business financing now, call us today to discuss the details of your business needs, and let our professional staff walk you through the process to help ensure your continued success.

The application process is simple, and approval can be made quickly. Checks are issued within 24 hours of factoring your receivables.