A factoring company purchases your companies account receivable portfolio and will immediately advance up to 95% of its face value. The balance of the funds - less the factors fee and discount - is released back to you once the receivables are collected.
The factoring company will take more than a casual look at a your company's balance sheet, but their real focus is on the quality of the A/R portfolio. They focus on the creditworthiness of YOUR customers, rather than your companies credit. Factoring is open to companies in all stages of development from startups to well established businesses.
| Companies that are Privately held | Manufacturers & Distributors | Transportation Companies |
| Public and Venture backed companies |
Service Companies | Companies In Transition |
| Companies experiencing rapid growth |
Wholesalers | Start Ups |
| Telecommunications industries | Importers | Technology Companies |
The factoring company will look for:
| High quality A/R | Decent margins | Capacity for growth |
| Potential for success | Clearly defined objectives | Competent and honest management |